Corporate Governance and Ethics: GSK Case Study Introduction GlaxoSmithKline is one of the largest pharmaceutical companies in the world, currently ranked at fourth in world based on market capitalization and the number of subsidiaries in the world following Pfizer, Novartis and Sarnoff multinationals…
The drugs manufactured by the company targets diseases such as asthma, viruses, infectious diseases, diabetes and digestion related complications (Mathew, 2011). The drug Industry controls a significant amount of the global revenue with drugs constituting over 10% of medical cost in the United States. It is also considered as one of the fastest growing segment in the world economy with significant research being conducted with pharmaceutical giants like GlaxoSmithKline international. A number of patents and ethical issues that guide the processes of drug discovery, clinical trials and marketing control the pharmaceutical industry. In this paper, ethical issues that guide the pharmaceutical industry will be analysed with emphasis placed on the practices of GSK and how lapses in the ethical practices has affected its ability to market high quality products. The processes of ensuring ethical practices within pharmaceutical discoveries, marketing and post market surveillance will also be evaluated to identify how GSK failed to prevent future ethical dilemmas. Ethical mistakes and conducts have a number of consequences on the reputation of a company as it affects the attitude of the market towards the company. The paper will also evaluate the impacts of ethical lapse at GSK on the market and how this affected the sales and market control. GlaxoSmithKline scandal also occurred in sections of china and this was revealed following an investigative report released by the Chinese government. This paper will also provide detailed description on why the GSK scandal happened on china and the impacts that the scandal affected the reputation of the company in china (Mathew, 2011). Ethical lapses and their impacts at GSK Ethical issues and litigation affects the position of a firm and the credibility of its products especially if the lawsuit against the company succeeds. A number of ethical lapses at GSK have been attributed to increased litigation claims against the company and these have had significant effects on the quality of their products and the market response. A wide range of criticism have been levelled against GSK for lack of adherence to drug testing and safety issues and this has resulted to a number of litigation measures which have consumed a significant amount of the total revenue generated by the company. Chief among the accusations that have been made against the company include intentional marketing of drugs with detrimental impacts on the health of patients. One of the main ethical misconducts that have had significant impact on the reputation of the company is the production of avandia drug in Cidra Puerto Rico. A report by Cheryl Eckard in 2010 revealed a number of ethical lapses in the production processes at the GSK plant in Cidra, Puerto Rico. Eckard, a quality assurance manager employed by GSK was assigned to assess the manufacturing conditions of the companies processing plant in Puerto Rico. In her report, she indicated the wanting condition of the processing plant and recommended for the halting of the production immediately to allow for a review and upgrading of the plant. However, this recommendation was ignored by the plant supervisor, who allowed for continued production and sales of the drugs despite the dilapidated condition of the plant. Despite her recommendations, which were meant both, improve the production pr ...
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