LAW122 151 F2016

490 Words

Ryerson University
 As CEO of Bendova, Steve Brenda has a legal duty towards the pharmaceutical company

because he signed a contract that is legally binding. Among other conditions, the contract states

that he is obliged to use his best efforts to increase profits. He may be held accountable if he is

found to not have used his best efforts to increase profits as this is a violation of the contract

Steve signed. This is the legal issue that he has realized and sought to avoid. Steve has a right

and a duty towards the stakeholders of the company but they are currently in tension, in this case.

The ethical dilemma, however, was when Steve ordered a $145 price increase of the drug

and added a new shelf life without any scientific basis. Steve has a right and a duty towards the

stakeholders of the company but they are in tension in this case. He has a special duty of loyalty

to all the stakeholders of the company. Those stakeholders that are directly affected by these

decisions are the customers and the company shareholders or board of directors. Those that will

gain from his decision will be himself and his shareholders while those that stand to lose are the

customers and their families. Shareholders will be very happy the company is performing better

and therefore Steven will also be very happy when his salary and bonus increases. The problem

is customers feel it is unfair for them to have to pay 30 times more than what they were

previously paying for the drug. Some ignored the true expiry date and as a result died because

the drug was ineffective when it expired. Bendova has a moral and ethical duty to protect its

customers from harm and injury. If it does not make the best decision that maximizes good

consequences towards all stakeholders, its future may be at stake. For example, the public may

protest these actions and even go as far as calling for boycotts and legal action against what they

see is unethical behaviour from a company that does not care about them.
 Increasing prices in this case is not illegal because the government has not stepped in to

regulate this price increase yet, however, because the company is selling a life-saving drug and it

is currently the only company that manufactures this drug its decision is unethical and this is

where ethics and the law diverge. The company can argue that it does not force anyone to buy its

drug because it released its patents to the general public and other companies are free to replicate

the drug. That defense by itself is not enough given the fact that no other substitutes currently

exist and it does not take into consideration the effect this decision has on customers that cannot

afford this drug at the new price. There is certainly more harm than good being done with a

decision like this.

References: Chris MacDonald, Law 122 Ethical Reasoning Module, Toronto, 2013.