GSK-ETHICS CASE

GSK-Ethics Case

GSK-Ethics Case

Introduction

The global pharmaceutical industry has long been considered one of the most profitable industries, and historically, it has proven itself to be a low risk, stable investment sector. However, the perception of pharmaceuticals as a 'safe bet' is changing as investor concern mounts over a number of recent negative publicity cases. A number of issues are undermining the industry as a whole giving rise to the importance of looking at individual companies' corporate social responsibility (CSR) performance. Some of these issues include: access to essential medicines by the developing world countries, fair pricing of existing drugs, ethical conduct of clinical trials and marketing, investment in research and development of medicines to cure diseases which generally affect poorer regions of the world. Although, in some respect I agree with the corporate view that the ultimate responsibility for addressing social issues lies within governments, I also think that there is much to be done by the private sector as well. But in order to come to any kind of conclusions on how the above concerns can be addressed, we as public at least need to have some knowledge of the subject matter and that is the reason why I have chosen the topic of my essay.

Pharmaceutical sector in general, main arguments put forward by the companies and counter-arguments

Before considering a specific example I would like to give you some interesting general information about why the arguments made by pharmaceutical companies in their defence don't 'stack up'. (The analysis is based on the Oxfam paper: "Implausible denial...", April 2001). A number of counter-arguments have been put forward by the major pharmaceutical companies, including:

GlaxoSmithKlein's CSR claims and counter-evidence

The following is an analysis of the company I would like to concentrate my research on; in the view of the sheer impossibility of analyzing the whole sector in any sort of detail in such a short time and space.

The vault website gives quite a good up-to-date description of the company: "Cobbled together from four sizable and formerly independent pharmaceutical companies, GlaxoSmithKline is one of the giants of the industry. In 2003, the company's revenue totaled $38 billion -- good for a profit of nearly $11 billion. In addition to prescription medications, Glaxo also manufactures vaccines, over-the-counter (OTC) drugs, oral care products and nutrition drinks. In all, the company markets more than 1,200 different brands which are sold in 130 countries worldwide. This comprehensive product line can be credited to Glaxo's massive $4 billion annual research and development budget, as well as to its 40,000 strong sales force -- the largest in the industry -- that keeps those products moving out of the warehouses and into the market. Glaxo's annual pharmaceutical sales make up approximately 7 percent of the worldwide market".

In the company's propaganda publications GlaxoSmithKline is portrayed as being only interested in public good and merely generates profits to satisfy minimum requirements of its stakeholders. "The very nature of our business is to improve human life by helping people to do more, feel better ...