Category Archives: Non-Profit ethics

Warren Buffet’s Investment Ethics

Mika Hamilton asked:

When investors think of the person and success they would most like to emulate, Warren Buffet’s name is top on the list. He is seen an extremely successful and moral investor that has made his money through dedication and diligence.

Buffet’s entire life is a testimonial to the American dream and what can be achieved through smart investing. Warren Buffett holds position two, as the second most affluent man in the United States. He is unique to that list because he has made the majority of his wealth investing in other companies.

Warren Buffett presently presides as the CEO of his investment company, Berkshire Hathaway. He acquired this company in the late 1960s, nurturing and molding it into the highest priced and most fruitful listing on the New York Stock exchange.

Warren offers an unusual duality for a business man. He is often described (even by himself) as an introvert with simple tastes and a disheveled appearance. Pair this shy, “grandpa-like” exterior with a commanding aptitude for power investing and judiciously seeking out corporate talent and management – the combination is unstoppable.

Warren Buffett’s methodology and life philosophy is diligently studied, he is worshipped, respected, and recognized as the world’s most successful investor of the 20th century. Conservative in business and appearance he is a liberal at heart, which contrasts him sharply with his peers. He has set the standard for and broken the stereotype that a successful business man cannot flourish financially and maintain a solid set of ethical ideals.

Warren Buffett is a “reluctant” philanthropist. Giving away money is just like loosing money, and Buffett does not like either. It was, his wife and later his traveling companion, Susan, that inspired, and encouraged Warren to give money to number of local charities. These nonprofit organization were located in regions suffering from poverty, that she found herself dedicated too.

Even though he believed that these organizations would misuse the funds and his money would be wasted, he donated freely. He supported his wife’s ideals and became an active participant in her causes which centered around abortion, birth control, and homeless youths. Together, the pair created a foundation called Glide.

This organization was a joint venture used to direct monetary contributions to those particular causes. In 2000 it was rumored that Buffett, upon his passing, intended to make the Buffett Foundation his sole beneficiary. Warren Buffet love baseball and can often be overheard and quoted using baseball metaphors in his lectures, books, and interviews.

This love of baseball prompted his over 1 million dollar contribution to Omaha’s Minor League Baseball Commission to ensure baseball stays in Nebraska. Warren also aided Grinnell College in acquiring a radio station that was public, for 13 million dollars. Grinnell, two years later, sold the station for 35 million dollar profit.

Buffet was temporarily apprehensive over the sale, but the returned revenue spoke for itself. He has also indulged his liberal side by investing in a libertarian magazine start-up in Washington DC, which eventually failed.

Resolving the Dilemma of Ethical Marketing

David Deakin asked:

Many service professionals will tell you that the words ‘ethical’ and ‘marketing’ don’t belong in the same sentence. While you’d be opening another can of worms by asking for a precise definition of ‘ethics’, let’s just say for the moment that often marketing leaves us feeling a little dirty, or sleazy if you prefer. One marketing guru summed it up by saying that marketing and sales are the world’s second-oldest profession – and often are indistinguishable from the first! Is that how you feel? If so, you have a problem (and you didn’t need me to tell you that!) That’s because without marketing you’re on the fast-track to retiring from a dull middle-management job at a faceless, heartless corporation. Not much in the way of choice, I hear you say!

Well, perhaps there is a third way. Let me say that a little more positively: I KNOW there is a way to be as successful as you choose to be at marketing without feeling like you need a hot shower and a scrub. Let’s take a few moments to explore the marketing dilemma and see if we can unravel it.

First, let’s acknowledge that not all of us would do anything for a quick buck. Most of us (certainly the professionals I work with) went into professional services because we really believed that we could do things better if we weren’t hamstrung by corporate red-tape, and that by doing things better we could better serve the customers whose dollar we were on. Has that changed? Not for me – and I doubt it has for you either. So at its heart our business exists because we believe it helps those we do business with as much as – if not more so than – it does ourselves. Many professionals remember this simple fact by carrying a Vision or Mission Statement which says so. (Without intending to get off track, I cannot recommend highly enough that you regularly reconnect with the reasons you went into business in the first place. Our Marketing Mindset process helps our clients to do just that. Please go to www.zee2a.com/7principles.html to view the process.)

Second, let’s agree that sometimes we really need to close a deal in order to survive. We’ve all had months when the taxman was calling, the bank manager was refusing to extend the overdraft and the kids were expecting to be equipped for university like Shackleton was for the Antarctic! Some of us have had more of those months than we care to remember! At times like that it doesn’t help to hear some smart aleck say that if you really need the money, you shouldn’t do the deal. They may be right – and if so we’ll have our nose rubbed in it later when we’re trying to untangle from a customer whose expectations were way too high but whose commitment was close to non-existent. But in the heat of the moment it’s human nature to do what we have to do in order to survive, so we do and say whatever it takes to get the signature on the proposal.

Clearly then, there are times when our commitment to a customer doesn’t closely mirror our overall vision for our business. And if we have too many of those, we start to question our vocation. You may not realise this, but you should: Getting to feeling like that is a GOOD THING! It means that your profession still means something to you; that you still want to be better. You want to be better for your own sake, and you want to be better for your customers’ sake. If you ever lose that desire, you’re in deep trouble and I’m not sure who can help you!

However, that scenario should not be the norm for service professionals. All too often, though, it is. Why? Because we neglect the necessary chore of regularly prospecting for customers until the urgency is great enough to force us out of our comfort-zone. Or, to put it another way, we don’t do any marketing until we’re having ‘one of those months’ – the type that make us unethical marketers! Are you sensing the pattern here?

Finally, then, lets discuss how to break the cycle that leads to ethical misdemeanours. It seems too obvious to say, but plainly it’s not: Do more marketing more regularly, and you won’t have many of ‘those months’. Of course it’s one thing to say it and quite another to do it. How do we market regularly? What does that involve? How do we get the most bang for the buck? We are busy people, so only the most effective marketing activities should be in our portfolio or else we’re wasting time and money, right?

Many years of testing and sifting have demonstrated to me that there is nothing that even comes close to Relationship Marketing in terms of effectiveness for service professionals. As I define it, Relationship Marketing is about building trust with and demonstrating credibility to prospective clients before initiating the crucial sales conversation – letting them get acclimitised to you and plying them with information about your services so that when you ask for their business they have little hesitation because they already know they’re going to get value-for-money. And for it to work successfully on a consistent basis, you have to have a game-plan for it.

Put in a nutshell then, a good Relationship Marketing game plan well-executed is the cure for the ethical marketing nightmare. So what are you waiting for? Make sure NOW that your marketing strategy is focused on building relationships – not just when you’re desperate for new business but every week and every month. Your conscience will thank you later!

©David Deakin and Zee2A Limited 2008.

Would you like to reprint this article? You may do so as long as you include the copyright notice and the paragraph below.

Inculcation of Ethics Through Education and Globalization Effects on Ethics

naraginti amareswaran asked:

Inculcation of Ethics Through Education and Globalization

Effects on Ethics

                                                                                                                                                            

INTRODUCTION

‘The care of human life and happiness, and not their destruction, is the first and only object of good government’…………..  Thomas Jefferson.  

‘When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist’……………..Dom Helder Camara.

            Now we are living in the technological modern world. Science and Technology have a prominent role in the development of the any nation in the world. India is a developing county in the world. Indian economy is the fourth largest economy in the world.   According to 2001 census the literacy rate of India is 64.84%. It is very less when compared to developed county in the world. The Planning Commission made a survey for finding out the number of persons below poverty line and estimated that 18.96% of the total peoples live below poverty line as of the year 1993-94. It is necessary to take care about poor and illiteracy.

ETHICS

            Ethics is a major branch of philosophy, encompasses right conduct and good life. It is significantly broader than the common conception of analyzing right and wrong. A central aspect of ethics is “the good life”, the life worth living or life that is satisfying, which is held by many philosophers to be more important than moral conduct. The major problem is the discovery of the summum bonum, the greatest good.  

            Ethics are related to institutions and rights. The Universal Declaration of Human Rights and human rights accordingly stem from ethics even if no moral grounds can be adduced. Yet moral grounds are to be found everywhere, including science. From the point where, in the name of ethics, science itself does not fall outside this domain, morals, similarly, do not lie outside the realm of ethics as ethics are a profoundly human, secular construction in so far as they represent a conscious choice or plan and a legal endeavour in terms of the law. The confusion that exists between rights and values on the one hand and between morals and ethics on the other lie at the heart of the debate on universal ethics, that is to say, universal ethics based on recognition of human rights.

            Morals are linked to the very definition of ethics. Moral principles are extremely diverse. As it happens, morals, historically speaking, have come to be increasingly connected with religion as human society has developed. Therefore, the moral debate has also become a religious one and, as many religious phenomena do not lie beyond the scope of laws, between majorities and minorities, nor the ideological choices involved, it may be difficult to find the same moral values for all societies. Moral values are very diverse. A number of values are universal.

In generally, values may be classified as;

?         Personal Values

?         Social Values

?         Moral Values

?         Spiritual Values and

?         Behavioural values.

All these values are necessary for all types of persons in the society.

Why Ethics?

            To enable young people to appreciate themselves and others, and to take greater responsibility for their actions and for the world around them.

ETHICS AND ECONOMICS

            There are three ways in which ethics enters economics. First, economists have ethical values that help shape the way they do economics. This builds into the core of economic theory a particular view of how the economy does work and how it should work. Second, economic actors (consumers, workers, business owners) have ethical values that help shape their behavior. Third, economic institutions and policies impact people differentially and thus ethical evaluations, in addition to economic evaluations, are important.

Economists have Ethical Values

            The issue of ethical value judgments in economics is at least as old as the John Neville Keynes argument which divided economics into three areas: positive (economic theory), normative (welfare economics), and practical (economic policy). The first deals with ‘what is’, the second with ‘what ought to be’, and the third with how to get from one to the other. Although the majority of economists admit that ethical values permeate welfare economics and economic policy, they proceed with some confidence in the belief that their work in pure and applied economic theory is ethically neutral. Methodologists studying the question are more cautious.

            Ethics in the relationship between developed and less developed countries dictates that the developedcountries treat the less developed countries fairly, aware of their disadvantaged economic position, andacknowledging that taking advantage of one’s own economic power inevitably will hurt the poor withindeveloping countries.

What is unethical?

Economic institutions, rules, practices which disadvantage the poor will be viewed as unethical

Ethical behavior requires “progressivity”:  the poor should benefit disproportionately

Hypocritical behavior viewed as unethical

 

Advisers who are not “fully honest” viewed as unethical

 

ETHICS AND GLOBALIZATION

 

            The world has been utterly transformed in recent years by a phenomenon affecting us all, what we call globalization. Although there was a time when it was possible for citizens of one country to think of themselves as owing no obligation to the people of other nations, admittedly that was long ago. Today national borders have less meaning as issues of trade, environment, and health, along with incredible technological advances of the last century, have left us with a legacy of connectedness we cannot ignore.

            We know globalization involves complete economic liberalization, i.e., opening doors to big businesses. Multinational corporations are at the forefront. Globalization wants the governments around the world to create an environment that is as conducive as possible to its growth of business. Regional groupings like APEC, GATT and WTO are totally committed to the same goal. The connection between big businesses, governments and regional and international institutions to create an environment for globalization is not an accident. It has historic roots in colonization, and as such, the dominant forces behind globalization are based in the developed world. Nonetheless, it would be wrong to describe globalization today as a replica of the Western colonial experience only. This is because one of the centres of power is based in Japan. Other centres of control in Northeast and Southeast Asia are emerging.

            In reflecting on the good and bad sides of globalization we find that whatever good has come out of it is actually a by-product. The very motive, maximiz
ing profit is responsible for its bad sides. So, globalization may well be one of the most serious challenges ever to the integrity of human civilization. Since society and culture hold some positive aspects it is important that it is not completely rejected. Ethics and moral standards should be injected into some economic activities as a short-term and medium-term strategy. The market should be regulated by ethical principles. The challenge is to devise ethical economically-sound policies built into the globalization process that are in keeping with values. I mean, the economic dimensions of globalization are not the only factors that need reconsidering. Culture should be guided by moral universal values whereby a strong ethic of restraint is within one culture is applied to prevent the dominance of another culture. The internationalization of the ethical values within the consciousness of the individual and the community could be the only hope for humanity. It is almost impossible to effectively censor all information through the Internet, satellite, etc. The individual who derives his/her value-system should be guided by time-honoured principles of what is right and wrong. Such individuals are the real antidotes to the bad effects of globalization.

Positive aspects of Globalization

Ø      Foreign Direct Investment (FDI) has helped to reduce poverty by creating jobs and improving incomes.

Ø      The expansion of trade and foreign investment has accelerated social mobility and strengthened the middle class.

Ø      New communications and information technology have helped disseminate knowledge in many fields of study and disciplines.

Ø      Communication is cheaper and easier. Costs of telephone calls as well as travel have fallen. This makes it easier to understand one another. Communities although heterogeneous, can be more cooperative now that are more means of understanding each other.

Ø      Globalization makes it possible for humanity to have compassion for each other when calamities, natural or man-made, affect others.

Ø      Issues such as human rights and public accountability are brought to the fore.

 

Ø      The rights of women are highlighted and the problems many women face are now addressed.

Negative aspects of Globalization

v     Environmental degradation due to unrestrained activities of multinational corporations whose sole aim is to multiply profits.

v     Although poverty has been reduced to a certain extent, new economic disparities have been created. There are stark regional disparities in poverty.

v     Basic necessities in life are set aside in favour of profits. Many developing countries have been occupied with facilitating foreign investment in industries that are lucrative to foreign markets and discarding the most fundamental needs of the people.

v     Globalization aids the removal of national controls over cross-border financial flows. Dramatic outflows of capital from one country to another have caused havoc in some currencies, particularly in Southeast, and South Asia including Bangladesh.

v     Advances in technology aggravated by the outflow of capital to low cost production sites in the developing countries has caused growing unemployment in the developed countries, which is an cause offence to human dignity.

v     Globalization has popularized the consumer culture. Consumerism has given birth to materialism where people are more interested in what they have rather than the essential aspects of humanity.

v     Global consumerism is now forming a homogeneous global culture where rich indigenous cultures of many developing countries are being replaced by cultures with vibrant economies.

v     Formal education systems are emphasizing technical and managerial skills responding to market demands and leaving aside traditional academic subjects. This means that education is nothing more than acquiring specific skills and techniques to do business and less emphasis on development of social or basic sciences.

v     Although the IT boom has given rise to an expanse of information there is a lot of information that is useless and meaningless causing people to be pre-occupied with unimportant things.

v     Double standards are present in the human rights aspect of the present world where they are used as part of many governments’ policy but only when it suits them.

            Because of globalization we have some advantages and disadvantages. We are human beings. Take good things and leave bad things. The policies of some developed countries are not good for developing countries. The ethical value decreases day by day. The business person gives more important for profit only. Organizational ethics is very important.

Centre for Globalization

The Yale Center for the Study of Globalization uses a variety of means to explore globalization and promote the flow of ideas pertinent to our core issues. The activities organized by the YCSG are designed to interconnect in ways that will further the Center’s mission and enable us to achieve our goals. It is necessary to establish this type of centre in our university also. In the modern generation also computer literacy is very low in our community. It is very sad thing that our students have no interest to learn computer education. It is very necessary in the scientific and technological world.

INCULCATION ETHICS THOUGH EDUCATION

 

 

            Value education means inculcating in the children a sense of humanism, a deep concern for the well being of others and the nation. This can be accomplished only when we instill in the children a deep feeling of commitment to values that would build this country and bring back to the people pride in work that brings order, security and assured progress.

            Value education has the capacity to transform a diseased mind into a very young, fresh, healthy, natural and attentive mind. The transformed mind is capable of higher sensitivity and a heightened level of perception this leads to fulfillment of the evolutionary role in man and in life

            By saying autobiography of good persons like Gandiji, Vivekananda, Ramakrishna Paramahamsa, Ramananda, Tagore and Sathya Sai Baba; we can easily inculcate values in the students and in the people.

 

Thinking with love is truth

Feeling with love is peace

Acting with love is right conduct

Understanding with love is non-violence

-Sathya Sai

            According the Sathya Sai Baba the following five values are necessary for students.

v     Right Conduct

v     Peace

v     Truth

v     Love

v     Non-Violence

Gandhi’s Values:

            In order to create new social order Gandhiji introduced Nai Talim in the year 1937, which is popularly known as Basic Education.

1.      Truth

2.      Non-violence

3.      Freedom

4.      Democracy

5.      Sarva Dharma Samabhava

6.      Equality

7.      Self-realization

8.      Purity of ends and means

9.      Self-discipline

10.  Suddhi

            If there is no place for values education in the curriculum, we can inculcate values through other subjects like Social Sciences & Technology. Learning takes place through lesson plans based on practical, meaningful and fun activities using the five components of:

Stories – about life, identity & relationships;

Quotations, poems and prayers;

Songs and music;

Silent sitting – exercises leading to inner calm and peace;

Activities e.g. drama, discussion, games, role play, community service, etc.

 

CONCLUSIONS

            Swamy Vivekananda said “We want that education by which character is formed, strength of mind is increased, the intellect is expanded, and by which one can stand on one’s own feet”. It is true. It is our Government duty to give such type of education for each and every student in the country. Through education only we can solve all types of problems. Through education it is easy to motivate people about  Ethical value and Moral values and human rights. Education gives knowledge, strength and creativity. India is a fourth largest economy in the world. The youth population is also very high. By proper using of science & technology and human & natural resources India will become developed country in the world.

We must protect the forests for our children, grandchildren and children yet to be born. We must protect the forests for those who can’t speak for themselves such as the birds, animals, fish and trees.

References:

Peter Singer. ‘One World-The Ethics of Globalization’, 2004.

Amrtya Sen. ‘On Ethics and Economics’.

 

3.      Value Education, Dr. Venkataiah, Editor, APH Publishing Corporation, 5, Ansari Road, Daryaganji, New Delhi – 110 002, First Edition, 1998.

4.      Value Education in India, Usha Rai Negi, Editor, Published by association of Indian Universities, AIU House, 16 Kotla Mark, New Delhi – 110 002, 2000.

http://www.google.com

http://www.yahoosearch.com

 

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Ethical Money Makes The World Go Round

Indiann Davinos asked:

Whatever your resources, socially responsible investment (SRI) can help you fulfil your dreams, and make the world a better place. SRI means you can channel your money away from industries that contribute to the destruction of the environment, companies employing sweatshop and child labour, business involved in animal experimentation and corporation that support repressive and brutal regimes

Like any investor a socially responsible one wants to see a sound return on their investment but they also want to invest in companies that demonstrate social and environmental principles. Even though SRI means limiting choice in types of investment it has not led to any systematic under performance in stocks, in fact it have done as well as or better than others on the market.

SRI developed in the USA as a response by concerned Quakers and other people disgusted that their investments were supporting the arms trade and the Vietnam war. Since then SRI has become a growing market within the UK, and is increasing at about 34% per year Socially responsible investors include institutions such as non profit organisations, Churches, trade unions, universities and individuals from all walks of life. What they have in common is a commitment to channelling their money towards investment that reflects their personal ethics and values. You don’t have to have lots of money to be a socially responsible investor although a minimum commitment is like with most funds about 50 pounds a month.

There are two main strategies to SRI: Avoidance Screening – choosing not to invest in industries for example, those with discriminatory employment practices, business activities with repressive governments, poor environmental records, animal testing, weapons contractors and the tobacco industry.Affirmative Screening – Actively seeking out investments in activities to support such as alternative energy and natural foods, companies that show commitment to their workers, communities and the environment.

Ethics or Bust.

Michael Mifsud asked:

ETHICS OR BUST

How can one forget the business of those scruples and the perplexed looks in peoples faces when asked as to what they had done with them. The same goes with ethics except that it does not sound as close to other hidden possibilities as the other word does. The effect is not the same. We talk about an unscrupulous person but not about an unethical one merely subscribing this to activities. Perhaps that is why it is rendered something that is not worth pursuing with respect as to what it has to teach us.

The political speaker, a disillusioned dissident, in one of the Latin European countries, spoke very freely about the need to introduce ethics into daily lives, much to the santimonious satisfaction of nodding heads in this Jesuit organised public debate.

“It is easy to be a Christian with a fat balance in the bank behind you”, said one alarmingly.” “A choice between ehics and feeding your ailing child..”said another with equally disapproving gestures.

In fact it renders the whole thing a little beyond social capability as ambition instinctively overrides ethics and the bulk of the much abused public expects it, fully intending to do the same if ever capable of getting to those corridors of  lucrative licence.

But is it a dead issue even in the modern European Countries – a chimera where much is swept underneath the carpet and higher levels of emerging power create added personal survival interests ? Apparently not, according to the Jesuit University in the United Sates dedicated to the propagation of Bioethical studies.

Yet again, can it be taken seriously when both politicians and religious leaders sepak bluntly in favour of issues and behaviour that decry the very existance of something as ephemeral as ethics.  In fact lamentably, even in strongly puritanical countries of the higher echelons of the European family, the doubt begins to emerge as to whether ethical values have not only disappeared but have been superseded by a new type of quantum politics and social behaviour now geared to basic survival with or without the electric toothbrush and the bijou residence.

The obvious paradox emerges when it becomes clear that ethical values and conduct have been and are necessary for a modern democracy to function. Also, for extended family reasons where freedom from aggression and clear sense of direction are taken for granted. But is this understood by the politicians and the tired looking religious figures who appear to have lost their definition of sin ?  The public may ride rough shod over ethical standards but it very much expects other not to, which like many other things in modern life, seems to be a one way thoroughfare.

The British Queen made a curious plea in her recent Christmas talk to the vast Nations she represents. It included a philosophical touch to the nature of service to others rather than taking from, acknowledging the former to be a mayor source of happiness. This criteria although once again difficult to absorb by those unacceptably high,  underprivileged members of modern developed societies who have been marginalised by successive insensitive governments, should be,  indisputably, the very base of all monetary and social systems. It is difficult to imagine how that piece of  bake could emerge edibly from that oven, otherwise.

Why this is so is not too difficult to understand even at its most primitive level. In its absence, delinquency could become as it does in some countries, a matter of personal choice, by the public or its leaders. If  smah and grab appears to work for those without the means or without belief in the ones who rule their collective destiny, then the choice is made early in the game.  Public example is therefore, like that demanded of credible Justice, to be seen in its ethical context and all behaviour free of doubt or hidden motivation. For the average and sensible member of the public a correct choice of direction follows, even if only to appear correct, and always if the message from above  is very loud and clear.  It is lamentably increasingly difficult to detect the clarity of the image  through the paper barricades and empty signals of those who should constantly set obvious examples.  And even more so, when the world appears to be falling apart in every direction and self mutilated giants like the financial institutions, like spoilt children,  make demands on all but themselves.

Ethical values precede democratic demands and one cannot essentially, however closely examined, do without the other.  Those who assume otherwise appear to be fated to get what they deserve – receding freedoms and eventual slavery.  Totalitarian government in pursuit of its own highly sectarian survival,  once consolidated, can impose political or religious shackles that could take much bloodshed and often centuries to shake off. Standing in defence of ethical standards would have been a better way of avoiding it.

Ethical values appeal to those with noble sentiment and whose consideratons within business transactions include principles like fair play and the aim to establish goodwill on both sides of the contracting fence. In business, leaving margins for both to play with and benefit from, is a sure formula for repeat sessions during the course of time.  Bad, opportunistic and imbalanced contracts serving the interests of one crafty side,  often provide the basis for a great deal of future aggression and bitterness which add venom and insecurity to the ripples of perceptive awareness which flow across all societies.

The creation of the yuppie, whilst stimulating personal,  positive advancement, literally unleashed an attitude based on false principles which served a very limited purpose. A purpose which victims of the exaggerations and inaccuracies of the selling jargon, if  not for those who perpertrated the abuse, would  forge the shortcomings of future decades to come. The pressure tactics,devoid of all ethics, in the main, fed people into economic bottlenecks, like property bubbles or accumulation of useless products. Those who applied it, would have not survived within markets requiring an ethicial approach to the establishment of the buyers needs. Unfortunately,truth at the bottom line depends on whether the buyer necessarily wants to hear it. If so, could one equate an ethical society with a firm inherited base, or one with a tactical defensive training based on do’s and don’ts. To eat or be eaten as some would say, but can values be taught and applied in this cut and thrust melee ?

Ethical standards some, would say, depends on upbringing which is not essentially the case as modern governments often sacrifice genuine interest for its governed in pursuit of narrow, party politically inspired benefits.  Finding ways and means of extracting the ultimate essence in unwilling contribution from the electorate, appears to feed most of the motivation. Additionally, it often bends the truth short of 360 degrees to ferment non existing needs or establish a nebulous base for a line to follow.  Public consciousness is often late in reacting to such pressures but curiously it misses little and gladly,  albeit rather tardily,  often reacts with apprehensive reponse, for a change. The sorry side, is that it nearly always has much to do with the pocket rather than the heart and often things and values have changed for better or for worse.

Legislation however clumsy,  in its pursuit of the protection that would otherwise be served by general public standards, is often a blunt instrument that perverse elements often find the loopholes to outwit, depending mainly in the already questionable legal profession,  to do its dirty work. Again, it takes li
ttle study to see that abuse of public confidence by national monopolies too politically related, has increased alarmingly.  So much so, that even basic need industries like energy and water suppliers  the profit balance precludes any and every attempt to obtain market applaud – often at the expense of the shareholder – always to the benefit of a few at the top of the fence. Any peripheral study of the market games of this sector would find one glaring omission – one that provokes a public sense of outrage if not helplessness – social concern. In other words, low ethical standards.

Ethics therefore one would assume should belong to the category of those utopian nostalgic sentiments bred out, by realistic hardline practice, but the sorry state of the institutions and economic hardware which should therefore still stay in place, urgently says otherwise. How to bring it back into line is something that deserves not only the close evaluation of those intending to restore the so called balance but the urgent reappearance on the political and religious field of those with values that speak of courage and determination.  Values that speak of eyes and not of lips.

Ethical Search Engine Optimisation Services

Pradeep Gupta asked:

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Ethics in the Workplace

Natalie Rhoden asked:

We’ve all heard these rules to live by: Don’t hurt, don’t steal, don’t lie, and the more famous “Do unto others as you would have done to you.” In our personal lives most people try to follow these rules. Ethics are often thought of by many as something that is related to the personal side of life and not to the business side. In some businesses, having ethics may actually be frowned upon. This is usually due to the fact that business is about doing what’s best for the bottom line and not always about doing the right thing.

It is commonly understood that there are ethics and then there are workplace ethics. Often we don’t stop to realize that there is no difference between personal ethics and ethics in the workplace; ethics are the same whether at work or in personal life.

After all, ethics are about making choices that may not always feel good or seem like they benefit you. Ethical choices are the “right” choices to make and are examples of rules to live by.

Practical Impact

Executives typically want the answers to two key questions about ethics in their offices: “How do workplace ethics apply to practical goals of my organization and the work of my employees?” and “Is there reliable data to support these assertions?” The Ethics Resource Center (www.ethics.org), a nonprofit organization, assists leaders to impact their organizations by identifying ethical risks and establishing systems to emphasize higher standards for business conduct.

The Ethics Resource Center annually conducts a National Business Ethics Survey (NBES) – a rigorous telephone survey of 1,500 U.S. employees. The NBES findings are encouraging for organizations that have an emphasis on positive workplace ethics. For example, employees have high expectations for ethics within their organizations. Nine in ten respondents say that they “expect their organizations to do what is right, not just what is profitable.”

This suggests that most employees are not cynical about ethics at work, encouraging news when considering the implementation or development of ethics initiatives as the long term success of any program rely on the active support of employees.

Formal ethics programs and informal ethics practices were shown to affect certain key outcomes. Employees who work in companies with active ethics programs who observe leaders modeling ethical behavior, and also observe the application of values such as honesty, respect and trust applied frequently at work, report more positive experiences that include the following:

·         Less pressure on employees to compromise ethics standards

·         Less observed misconduct at work

·         Greater willingness to report misconduct

·         Greater satisfaction with their organization’s response to misconduct they report

·         Greater overall satisfaction with their organizations

·         Greater likelihood of “feeling valued” by their organizations

Findings of Concern

The NBES uncovered a substantial gap between senior and middle managers and lower-level employees. A consistent finding with management was the perception that their organizations have a positive ethical environment. This conflicts with the perception of lower-level employees however. This suggests that executives may underestimate the importance of specific ethics issues and concerns facing employees.

This disconnect may also position executives to fail to address these issues adequately within their organization’s ethics programs. Therefore it is important for executives to include input from employees at lower levels in the development of ethics programs and to continue to seek out their input and feedback on a regular basis.

In addition to the communications gap between employees and executives, one in three employees believe that their coworkers will perceive them as “snitches” if they report misconduct. This is roughly the same proportion of employees who believe that management will see them as “troublemakers” for reporting ethical concerns. A key element to take away from this discovery is the need to address and eliminate retaliation systemically, at the management and peer levels throughout the organization.

Questions Answered

Let’s go back to our two key questions: “How do workplace ethics apply to practical goals of my organization and the work of my employees?” and “Is there reliable data to support these assertions?” There are a variety of practical reasons for executives to focus on workplace ethics and reliable data that supports these efforts. The NBES findings consistently link ethics programs to more positive organizations outcomes and increased employee satisfaction.

It would be naïve to suggest that an emphasis on ethics will improve the work environment and solve the company’s problems overnight. In many cases a well developed and organized effort to target key ethical issues sends an important message. It tells employees that your organization is moving in a positive direction, one that is positive for them as individuals.

Establishing an Ethics Program

Establishing an ethics program is not an exact science. As with any organizational program, it will involve the input and cooperation of many people. The effectiveness of any organization’s approach will depend on characteristics that are unique to its culture, the leadership styles, proper planning, and so on. Since some people may be uncomfortable talking about the issues of ethics it can be helpful if management first asks, considers, and then responds to the following questions:

·         Why might good people in this organization do unethical things?

·         What are our organization’s values?

·         Have we adequately articulated these values internally and externally?

·         Does our organization have written ethics policies, procedures, or structures?

·         To whom is our organization accountable?

·         What do we mean by “success”?

·         Does the leadership of our organization support the idea of an ethical workplace?

With the feedback obtained by discussing the questions above, management will have a better idea of the perceptions their employees have on how the company is performing ethically.

In the end, it’s all about beginning with our personal and collective understanding of ethics. The second step is awareness of, and solutions to, questions concerning ethics as applied to the workplace. Many universities are now heavily applying the teaching of ethics to their curricula. Graduates of these programs take this information into the workforce with the understanding that solid, positive ethics need to be applied there as well as in the private sector.

In a perfect world, corporations will be better able to avoid embarrassing scandals that appear and reappear in both national and world-wide news scandals. Small businesses will be able to keep and attract more clients and customers. Negotiations between businesses could be accomplished with increased consideration for the other company. This is something for which we can all strive.

Improve the Ethics of Law Enforcement Through Ethics in Policing

Vikram kuamr asked:

There is such a thing as improving the ethics of law enforcement within the country. This is possible through Ethics in Policing Ltd, a non-governmental and non-profit organization. EiP or Ethics in Policing has been established with the ideal to supply and support the philosophy of transparency and openness in the law enforcement and policing community. This aim is possible by offering a forum worldwide, discussing the ethical issues which are inherent within policing and law enforcement. This aim is regarded as significant because not only does this affect various law enforcement organizations, it also affects the entire community. EiP will make sure that this objective is carried out.

If you are interested or involved within the system of criminal justice or policing, Ethics in Policing invites you to take part in this goal. The entire bodies of law enforcement are also urged to join this cause. You can share your knowledge regarding law enforcement. You can also share your different experiences regarding the ethical problems which affect the whole community. If there are certain things which you want to know more about, the online site of Ethics in Policing has an information Room where you can learn the things you want to know.

This section of EiP’s website puts up information and web links to world policing bodies and other related agencies. Through the info room of EiP, you will be able to search easily for a specific policing organization within a specific country. You can also browse information by continent. Other than information, you can also read policing news which pertains with ethical issues. This news is derived from all over the world and updated each day. What is more, the news is filed for possible references in the future. If you have research projects, you can support these by referring to the policing news update of EiP.

The vision of Ethics in Policing is the openness of the international law enforcement. EiP aims to develop, support, and uphold the philosophy of transparency and openness within the law enforcement’s international community. Forums are provided, wherein issues related to law enforcement are being discussed. This is done in order to fortify policing integrity with the help of proper ethical practices and leadership. The strengthening of police integrity will greatly benefit law enforcement members and the entire civilian community.

The development of the discussion forum aims to assist law enforcement organizations, agencies, and members who like to raise and discuss ethical matters related to policing. The ethical decisions made by law enforcement agencies are monitored. What is more, there is also an establishment of ethical benchmarking. There is a development of project and research so as to teach and uphold comprehension of ethical matters which influence and affect policing. The exchange of law enforcement concepts and practices are facilitated. This is done in order to improve the process of learning, thereby creating an ethical atmosphere within the community of law enforcement. Police training consultancy is also possible through Ethics in Policing. If you think that policing bodies seem to be getting corrupt, you can uphold the ethics of the international law enforcement by joining the cause of EiP.

Patents and Ethics in the Pharmaceutical Industry

Kamil Kanji asked:

Abstract

This paper is concerned with the impacts of strict patents in the pharmaceutical industry, focusing on the Trade Related Aspects of Intellectual Property Rights (TRIPs) Agreement. It discusses the historical and current policy context, to better understand how strict patents affect the availability of essential drugs in developing countries.

The research shows that the pharmaceutical industry prioritises profit above health. Strict patents reduce the availability and affordability of new essential drugs in developing countries, and thereby have a negative impact on the health of the world’s poor. Larger pharmaceutical companies benefit more than smaller companies because they have a monopoly in the industry. They invest more in research and development and, linked to economies of scale, are better positioned to exploit markets for new drugs.

The example of India highlights the importance of generic production and essential drugs in developing countries. It shows that while TRIPs promotes economic growth of the industry and encourages investment in research and development of new drugs, it increases the prices of new essential drugs, thereby isolating benefits from the majority poor populations in developing countries.

The paper suggests that based on historical and current trade policy, developed countries have an ethical obligation to allow poorer countries to develop infrastructure for their pharmaceutical industry, a responsibility not being fulfilled. It suggests TRIPs be revised under a more ethical framework. This includes increasing public funding of research and development, shortening the length of patents and allowing developing countries to generically produce essential drugs.

The paper highlights the interconnectedness of social, economic and political factors that could increase the availability of essential drugs in developing countries. It highlights the importance of better understanding the issues surrounding strict patents, and why the scientific community is critical to this process, in terms raising awareness and collaborating with independent organisations and concerned citizens to ultimately press governments for change at the national and international level.

Table of Contents

1. Introduction

1.1 What are Patent Laws?

1.2 What is TRIPs?

1.3 Focus and Structure of the Paper

2. Pharmaceutical Industry for Profit or for Improving Health?

2.1 Scale of Profits

2.2 Investment Priorities

2.3 Diffusion

3. Essential Drugs and Generic Production

4. Impacts of TRIPs

4.1 Main advantages

4.2 Main disadvantages

4.3 The Doha Agreement and Compulsory Licensing

5. Conclusions

6. References

1. INTRODUCTION

‘As the ancient scourge of polio was rolled back by his vaccine 50 years ago, Jonas Salk, the inventor of the polio vaccine was asked why he never took a patent out on the medicine, a patent that would have made him wildly rich. “There is no patent,” he replied … “Could you patent the sun?”’ (Salon.com magazine 2001).

This paper explores the impacts of pharmaceutical patents on drug availability in the third world, focusing on the impacts of the Trade Related Aspects of Intellectual Property Rights (TRIPs) Agreement. It highlights the value of essential drugs and generic production in developing countries, using India as a case study. It also explores alternatives to TRIPs and the role of the scientific community.

1.1 What are patent laws?

A patent can be defined as ‘a monopoly right granted to person who has invented a new and useful article, an improvement of an existing article or a new process of making an article’. It consists of an exclusive right to manufacture the new invented article, or manufacture an article according to the invented process for a limited period. During the term of patent, the owner of the patent, i.e. the patentee can prevent any other person from using the potential invention .

Figure 1: Brief History of Patent Law

The timeline below illustrates the brief recent history of patents in the world .

1880-1882

Patent statutes introduced in most European countries

1883

Paris Convention for the Protection of Industrial Property – cornerstone of the modern international patent system.

1947 International Patent Institute (IIB) established at the Hague

1970

Patent Co-operation Treaty signed in Washington, D.C.

1978

International Patent Institute integrated into the European Patent Office (EPO)

1979

Bayh-Dole Act passed-granted permission to U.S. universities to license and profit from federally sponsored research*

1980

International Patent Documentation Centre (INPADOC) integrated into the EPO

In the pharmaceutical industry patents have a straightforward objective. They provide a strong incentive for companies to invest in the research and development of new drugs, knowing that they will be able to recuperate costs and, subsequently, profit from the new drug. However, patents enable parent companies to control the price and availability of new drugs. There is no competition from other companies to produce the drug, which would usually lower the price. Thus, increasing the length of patents can reduce the availability of new essential new drugs in developing countries, with knock on health problems.

Essential drugs can be broadly defined as those that satisfy the health care needs of the majority of the population. They should, therefore, ideally be available at all times in adequate amounts; in the appropriate dosage forms; at reasonable (affordable) price; and, meeting the criteria of quality, safety and efficacy (New Strait Times 1998).

Under the term of a patent, drugs, essential or non-essential, can only be produced by the parent company. This means that there is no competition from other companies to produce the drug, and the parent company can charge a high price for the drug, effectively making the drug unavailable for poorer people.

New drugs tend to be more available to developed countries, because people are more affluent and can afford higher prices. For this reason, pharmaceutical companies tend to market their drugs at developed countries. Overall, developed countries benefit more from new technology and advances in science because their governments, companies, and people can afford to buy into the technology.

The World Trade Organisation’s (WTO) Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement, which extends the length of patents, enables companies to significantly increase their profits and increase the technology gap between developed and developing countries.

1.2 What is TRIPs?

The Trade Related Aspects of Intellectual Property Rights (TRIPs) was added to the General Agreement on Tariffs and Trade (GATT) at the end of the Uruguay Round of trade negotiations in 1994. It came into full force in January 2005, and its inclusion by the World Trade Organisation (WTO) was the ‘culmination of a program of intense lobbying’ by the United States, supported by the EU, Japan and other developed countries .

The United States strategy of linking trade policy to intellectual property standards can be traced to senior management at Pfizer (a large United States pharmaceutical firm) in the early 1980s. Pfizer mobilised corporations and made maximising intellectual property privileges the number one priority of United States trade policy .

According to the WTO, ‘TRIPs is an attempt to strike a b
alance between the long term social objective of providing incentives for future inventions and creation, and the short term objective of allowing people to use existing inventions and creations’ .

The following requirements of TRIPs all have a bearing on the pharmaceutical use of patents .

? Copyright must be granted automatically, and not based upon any “formality”, such as registrations or systems of renewal.

? National exceptions to copyright (such as “fair use” in the United States) must be tightly constrained.

? Patents must be granted in all “fields of technology” (regardless of whether it is in the public interest to do so).

? Exceptions to patent law must be limited almost as strictly as those to copyright law. In each state, intellectual property laws may not offer any benefits to local citizens which are not available to citizens of other TRIPs signatories (this is called “national treatment”). TRIPs also has a most favoured nation clause.

? Patents in the pharmaceutical industry will apply for 20 years, instead of 10 to 15 years.

Some developing countries began to grant their own patent protection in the late 1980s, but TRIPs is a compulsory requirement for any country who wants to be a member of the World Trade Centre, and with that memberchip access to international markets and trade relationships. Countries which do not adopt TRIPs can be disciplined through the WTO’s dispute settlement mechanism, which is capable of authorising trade sanctions against dissident states . Therefore, the economic and poltical threats, which could cripple a poor economy, effectively forced developing countries to ratify the agreement.

The TRIPs agreement makes it easier to obtain and enforce patents. It increases the length of pharmaceutical patents, from 10 to 15 years to 20 years, which encourages companies to invest more in research and development and promotes economic growth. However, it favours developed countries, which have the capacity to enforce their rights globally, and create more exclusive trade options under the Intellectual Property Rights (IPRs). Developed countries have more pharmaceutical infrastructure and companies that are used to using patents to make profit.

1.3 Focus and structure of this paper

Chapter 1 introduced the main contentions of using strict patents in the pharmaceutical industry. It explained how patents work, and the main changes that TRIPs will make to the pharmaceutical industry.

Chapter 2 shows the monopoly of a handful of large pharmaceutical companies in the pharmaceutical industry. It provides a sense of the scale of the profits made by these companies, contrasting the investment priorities and types of drugs produced with those that are needed in developing countries. The Chapter debates whether the industry is for profit or health, briefly highlighting how companies make false claims through advertising in developing countries.

Chapter 3 introduces the idea of essential drugs and generic production, exploring the benefits with a case study of India. Chapter 4 shows how TRIPs will restrict generic production of essential drugs, and the impacts this will have on the majority poor populations in developing countries. The conclusion, Chapter 5, suggests how TRIPs could be revised under a more ethical framework, exploring the historical and current drug policy context, with particular emphasis on the role of scientists.

2. PHARMACEUTICAL INDUSTRY FOR PROFIT OR HEALTH?

In an attempt to understand how pharmaceutical companies control the availability of essential drugs, and use patents to make substantial profits, this chapter debates whether the pharmaceutical industry is for profit or health. It looks at the scale of profits made by the pharmaceutical industry and their investment priorities, also challenging whether ‘diffusion’ of biotechnology works to provide essential drugs to developing countries.

2.1 Scale of profits

There is a very familiar trend in the international pharmaceutical industry. A handful of multinational companies, originating from developed countries, have a great deal of economic power, which gives them control over drug availability and health. They also lobby governments to make trade policy which suits their profit making agenda. In 1996 the first ten multinational pharmaceutical companies accounted for approximately 36 per cent of the world pharmaceutical sales of US$ 251 billion .

Table 1: The World’s Top Ten Pharmaceutical Companies in 2003

Company Pharma Profit ($million) Pharma Sales ($ million) Pharma Operational Profit Margin

Pfizer 12,920.0 28,288.0 45.7%

Merck & Co. 10,213.6 21,631.0 47.2%

GlaxoSmithKline 7,598.2 26,979.0 28.2%

Johnson & Johnson 5,787.0 17,151.0 33.7%

AstraZeneca 4,006.0 17,841.0 22.5%

Novartis 3,857.3 13,497.4 28.6%

Wyeth 3,505.5 12,386.6 28.3%

Aventis 2,969.6 15,705.4 18.9%

Abbott 2,739.0 9,304.0 29.4%

Takeda 2,446.6 6,838.3 35.8%

Group Subtotal 56,042.9 169,621.8

Average 31.8%

Source: Adapted from Scrip Report 2003

The pharmaceutical sector racks up the largest legal profits of any industry, with an average 18.6 % return on revenues in 2001 (Resnik 2001).

However, Table 1 shows that the top ten companies achieved a much higher average profit margin of 31.8% in 2003. Thy have a monopoly over the industry. Linked to economies of scale, larger companies can exploit larger market penetration to increase their profits. For example, Pfizer and Merck & CO, two out of the top three pharmaceutical companies in 2003 according to gross sales, had a profit margin of 45.7% and 47.2% respectively. This was much higher than the average profit margin of the top ten companies (31.8%), which illustrates the relationship between economic power and power of market exploitation.

The pharmacetical industry justifies their high profits with the argument that a great deal of time and money is invested in the research and development of new drugs. In 1998, developed countries spent US$520 billion on research and development, more than the total economic output of the world’s poorest 30 countries. In 2003, it was estimated that the average cost of producing a new chemical compound is around US$ 200 million . Thus, the industry is keen to protect their investments and subsequently reward their efforts by making a great deal of profit. However, there are ethical issues as to whether the scale of the profit can be justified, given the healthcare problems that exist in developing countries resulting from the unavailability of essential drugs.

Large pharmaceutical companies maintain their monopoly by investing great sums in legalities to lobby governments into protecting the industry, by making strict patent law. ‘The combined worth of the world’s top five drug companies is twice the combined GDP of all sub-Saharan Africa and their influence on the rules of world trade is many times stronger because they can bring their wealth to bear directly on the levers of western power’ (Borger 2001).

One of the leading US biotechnological companies, Genentech, has four times as many lawsuits to protect its patents as it has products (Fowler 1996). At least one company has been created in the US whose ‘main business,’ according to the Wall Street Journal, ‘is buying up broad patents and then sueing other companies for alleged infringements’ (Fowler, 1996).

Thus, there is also the issue that investing so much money and time in litigtion is highly unproductive, when this money could be better spent on research and development of new drugs, and subsidising the cost of essential drugs in developing countries.

2.2 Investment priorities

The world market for pharmaceuticals shows a clear division: non essential drugs are produced and targeted at developed countries promising high profits, while developing countries are s
till in need of basic healthcare and essential drugs.

Of the 1223 new drugs marketed between 1975 and 1996, only 13 were developed to treat tropical diseases – and only four were directly the product of pharmaceutical industry research. In recent years, drug companies have produced thousands of new compounds but less than 1% are for tropical diseases .

In 1998, global spending on health research was US$70 billion , but 90% of the money spent on health research and development focuses on medical conditions responsible for only 10% of the world’s burden of diseases (Benatar 2000). Only US$300 million was dedicated to research for vaccines for HIV/AIDS and only US$100 million to malaria research, diseases with the highest mortality and morbidity rates in the world, and devastating in developing countries.

‘It would be more profitable to develop a drug designed to enhance sexual performance for Anglo-American males than to develop a medicine designed to treat or prevent malaria’ (Resnik 2001).

There is also the suggestion that pharmaceutical companies focus more effort on a certain drug in developing countries when it is in their research interest; “Of diseases in the Third World, AIDS is getting the most attention and focus. Not coincidentally, it is also one of the few diseases that remain a threat to First World countries” (Censored 2000).

Pharmaceutical companies are able to devote their resources to non-essential drugs targeted at the richer markets of developed countries and at the same time, exploiting the markets in developing countries by influencing the world price for drugs. For example, pharmaceutical companies have long resisted “differential pricing” on their US$12,000-a-year courses of anti-AIDS drugs, which would allow a course to cost less in Cameroon than in Canada . Thus, the effect of purchasing power parity means that the prices are even higher in real terms in developing countries.

Drug Aid

In many cases, drug companies will provide drugs to developing countries at cheaper cost as aid. For example, in March 1998 Glaxo Wellcome (UK) announced that it would sell its anti-HIV drug AZT for 70 per cent below the normal price to pregnant women in developing countries . However, drug aid is not always beneficial. Reich et al (1999) found that out of 16,566 drug donations shipped from the US to 129 countries between 1994 and 1997, 10-40% were listed on neither the national essential drug lists nor the WHO model of essential drugs in developing countries. Also, 30% of shipment items had a year or less of shelf life (ibid.).

Advertising and false claims

There is also evidence that companies, in addition to prioritising non-essential drugs for developed countries, exploit markets in developing countries by convincing people that they need non-essential drugs. A survey, in the Annals of Internal Medicine found that ‘62 per cent of the pharmaceutical advertisements in medical journals were either grossly misleading or downright inaccurate’ (Madeley 1999).

There has been much criticism of the advertising in developing countries, claiming it is particularly persuasive in nature and that people are misinformed and encouraged to believe wild promises. This illustrates the exploitative nature of the pharmaceutical industry, and the quest for profit at the expense of health.

“In the corporate headquarters of major drug companies, the public relations posters display the image they like to present: of caring companies that bring benefit to humanity, relieving the suffering of the sick. What they don’t say, is that, so far, their humanity has not extended beyond the limits of the pockets of the sick” (Hilton 2000).

In summary, the pharmaceutical industry is for profit. A handful of economically powerful companies use economies of scale to exploit the markets of developed and developing countries. As a whole, the pharmaceutical industry is:

? Priortising investment in non-essential comfort-oriented drugs for the wants of the more affluent in developed countries, whilst neglecting the needs for essential drugs for poorer people, particularly in developing countries.

? Investing heavily in litigation and patents to restrict competition from other companies, and enable control over the price and availability of drugs.

? Exploiting people in developing countries, using persuasive advertising to make false claims.

? Motivated by profit, not health.

As Smith (1994) points out, ‘There is a direct conflict between the pursuit of health and the pursuit of wealth.’

2.3 Diffusion

Policymakers and representatives of the pharmacetuical industry argue that relevant technology reaches poorer people by means of ‘diffusion.’ This describes the process by which drugs become available to the poor after patents expire, and when competition to make the drugs drives down the prices of the drugs so that poorer people can afford them. However, as agents of disease, including bacteria and viruses, are continually adapting to drugs and developing resistance to them, new drugs are often essential and life saving, which means it is critical they are available very soon after production in developing countries. Patents reduce the availability of new essential drugs, because they increase the time it takes for diffusion to take place, if it happens at all.

The lack of infrastructure in developing countries makes it difficult for essential drugs to reach those who need them, which can increase the time it takes for technology to ‘diffuse’ to the poor, even after patents have expired. For example, oral rehydration therapy, a simple and cheap salt-and-sugar solution, has been mass distributed since the 1980s and has greatly reduced child deaths from diarrhoea, ‘but even though it only costs 10 cents a sachet, it is still unavailable for 38% of diarrhoea cases in Third World countries.’ Another example, Penicillin, discovered in 1928 and first marketed in 1943, is unavailable to 2 billion people. (Healey 2001)

The unavailability of essential drugs therefore extends beyond a lack of access to new drugs designed to treat devastating infectious diseases [essential drugs] (Resnik 2001). 50% of people in developing nations do not have access to even basic medications, such as antibiotics, analgesics, bronchodilators, decongestants, anti-inflammatory agents, anti-coagulants and diuretics (Reich 1979-1981).

In the 1980s structural adjustment programmes were enforced on developing countries by the International Financial Institutions (IFIs), such as the World Bank and International Monetary Fund. These trade liberalisation policies involved the establishment of ‘export-processing’ zones, which offered financial incentives, such as tax concessions, to companies. By favouring privatisation and encouraging multinational companies to move their operations to developing countries, one of the supposed objectives of economic liberalisation was to assist ‘development’ and the transfer of pharmaceutical technology to developing countries.

However, there has been a lack of ‘diffusion’ of knowledge and technology. In fact, it is the lack of technology transfer measures in export-processing zones that attract pharmaceutical multinational companies. With firm control over technology, even when high-tech methods of production are used they can be kept away from the domestic economy. The southern Indian city of Bangalore has, ‘thanks to Western companies’ passion for outsourcing, grown into one of the world’s premier technology hubs and is the centre of the India’s growing IT industry’ (its export revenues rose from US$150 million in 1990 to $4 billion in 1999). However, areas surrounding Bangalore are in fact extremely ‘low-tech’. In Karnataka (also state capital), there were still only 2.73 internet connections per 1000 people in 1999; in even poorer states (like Orissa), that rate dropped to 0.12 connections per 1000 people.

‘As it
turned out, there has been virtually no transfer of relevant technology by these companies to developing countries … in fact, by using the power that control over technology brings, they have eliminated many potential competitors and prevented indigenous pharmaceutical industries from developing to meet the real needs of the people of the third world’ (Kanji et al 1992). Thus, the evidence leads me to personally agree with this line and disagree that diffusion can be relied upon to make essential drugs available at times when they are needed most in developing countries.

Multinationals provide employment in developing countries, it is typically very low paid with little security, and the products (and the techniques and profits) go back to the companies of developed countries. Unfortunately, even though direct foreign investment provides low-paid jobs and does not transfer technology, those jobs are still vital for many that live in poverty and have limited employment options. This highlights why re-regulation of the corporate sector is required so that markets meet certain social criteria. For example, interfering with markets to reduce the price of essential drugs in developing countries.

“Pharmaceuticals, they are a commodity. But they are not just a commodity. There is an ethical side to this because they’re a commodity that you may be forced to take to save your life. And that gives them altogether a deeper significance. But they [big pharmaceutical companies] have to realize that they’re not just pushing pills, they’re pushing life or death. And I believe that they don’t always remember that. Indeed I believe that they often forget it completely.” (Drummond 2003)

3. GENERIC DRUG INDUSTRIES AND ESSENTIAL DRUGS

In many countries with large poor populations, such as Argentina, China, Egypt and India, national policy enabled a locally financed pharmaceutical industry to develop almost exclusively engaged in manufacturing generic drugs. These industries could ‘copy cat’ certain drugs and in some cases the manufacturing processes of other pharmaceutical companies.

This Chapter illustrates the main benefits to health of generic production in developing countries, in terms of increasing the availability of essential drugs. It uses India as a case study.

Benefits

In countries with generic drug industries, drug prices are low because the primary national objective is for the government to provide affordable drugs for its people, and develop the industry for economic welfare and greater self-sufficiency. India holds a record, with prices for many drugs 10 to 100 times lower than in developed countries. The introduction of generic antiretroviral drugs by Indian companies reduced the price of these drugs by 97% (Henry et al 2002). Research and development efforts by generic drug industries have also led to the development of vaccines against leprosy and hepatitis B, and anti-cancer drugs .

Multinational companies have less economic control over the market because the domestic drug industry controls the domestic market. Therefore, poorer people are less dependent on multinational companies and the extortionate prices that they can charge for drugs. In addition to lower cost, as will be seen from the case study of India, generic drugs have the advantage of being competitive in quality to those produced by large multinationals, originating from developed countries.

A case study of India

In India, multinationals held only a 20 per cent market share in 2000 : national pharmaceuticals have gained knowledge and capacities in research and development, which has enabled them to replicate manufacturing processes for already known drugs, and develop a bulk drug industry for various chemicals and antibiotics.

India’s local drug companies have long benefited from a relaxed patent regime.

History of patent law in India (up until the 1970s)

1856 The Act Vi Of 1856 On Protection Of Inventions Based On The British Patent Law Of

1852 Certain Exclusive Privileges Granted To Inventors Of New Manufacturers For A Period Of 14 Years.

1859 The Act Modified As Act Xv; Patent Monopolies Called Exclusive Privileges (Making. Selling And Using Inventions In India And Authorising Others To Do So For 14 Years From Date Of Filing Specification).

1872 The Patents & Designs Protection Act.

1883

The Protection Of Inventions Act.

1888

Consolidated As The Inventions & Designs Act.

1911

The Indian Patents & Designs Act.

1999

On March 26, 1999 Patents (Amendment) Act, (1999) Came Into Force From 01-01-1995.

1972

The Patents Act (Act 39 Of 1970) Came Into Force On 20th April 1972.

Source: Adapted from http://www.legalserviceindia.com/articles/patents_geographical.htm accessed 10th November 2004

In the past, India honoured patents on manufacturing processes but not patents on products, which allowed generic drug companies to ‘reverse engineer and manufacture drugs’ without paying royalties to the companies who own patents on those drugs (McNeil 2001).

The features of the 1970 Patents Act helped to promote India’s pharmaceutical industry, which specialises in generics. It has enabled considerable technological innovations and development of knowledge, with its provisions enabling the drug industry to grow at a rapid pace. (The Lancet, 2004)

The Indian Pharmaceutical industry is the pre-eminent sector in India, in terms of scientific and technological developments. India ranks among the top 15 drug manufacturing countries in the world. In 2004, the domestic drug industry met approximately ‘70% of India’s demand for bulk drugs, drug intermediates, chemicals, pharmaceutical formulations in the form of tablets, capsules and orals’ (Lancet 2004). India’s generic drug industry has enabled a huge number of people to afford essential drugs that would have otherwise been out of reach because of patent induced high prices and unavailability. Generic production therefore promoted self-sufficiency and assisted economic development.

“The Indian firm Cipla’s offer to MSF [Médecins sans frontiéres] to provide a cocktail of antiretrovirals for less than $350 a year (compared to the big boys’ $10,000) resounded like a thunderbolt. Suddenly, the emergence in the South of very low cost generics producers seems credible” .

4. IMPACTS OF THE TRIPs AGREEMENT

This chapter discusses the impacts of the TRIPs agreement (January 2005) on India’s pharmaceutical industry. It starts by mentioning the pressure and reasoning behind India’s decision to comply with TRIPs, and then examines the positive and negative aspects of the agreement, which might emerge in the next few years.

India amended the law governing patents i.e. Patents Act, 1970 by Patent (Amendment) Act, 2002, on 20th May 2003.

The main features of Patent Act, 2002, were:

? Enlargement of non-patentable inventions

? Twenty year patent term for all patents

? Burden of proof on defendant in case of infringement when a patent is for the process of producing a new product

? Making importation a right of a patentee

This Act prepared India for full TRIPs compliance, and currently, India is adapting to the changes to the pharmaceutical industry under the TRIPs Agreement, which came into force on January 1st 2005.

Indian companies have now lost the opportunity to develop processes for patent protected drugs. This could allow multinational companies to establish a monopoly over the Indian drug market, unless Indian pharmaceutical companies can compete.

Pressure to comply with TRIPs

There was pressure for India to meet TRIPs requirements because India would have otherwise been disciplined by the WTO, and ‘India’s market access rights would have been jeopardised’ along with other benefits (Lancet 2004).

There was intense lobbying, pre
dominantly by the United States pharmaceutical industry, to impose the TRIPs agreement. PhMRA claimed that the US pharmaceutical industry loses US$500 million annually only through a lack of patent protection on drugs in India . The GlaxoSmithKlein CEO Jean-Pierre Garnier described the Indian pharmaceutical industry as price-undercutting “pirates”, and said the company “is not doing this to get a Nobel Prize.”

In response, Hamied, on behalf of the Indian pharmaceutical firm CIPLA, said “Indeed, we are a commercial company. But I market 400 products in India. If I don’t make money on a half-dozen of them, it’s no big deal. I don’t make any money on the cancer drugs we sell or drugs for thalassemia, a blood disorder that’s common in India. We sell these drugs virtually at cost because I don’t want to make money off these diseases which cause the whole fabric of society to crumble. India alone will have 35 million HIV cases by 2005, and it’s something we can’t afford.” (Lindsey 2001)

4.1 Main advantages

On the one hand, TRIPs could promote more research and development and stimulate competition to produce new drugs. On the other hand, India will lose its ability to generically produce essential drugs for its majority poor population.

Generic drug production in India has meant that research and development of new drugs has taken a back seat. Indian companies are ‘getting actively engaged in research and development of their own molecules/pharmaceutical products and processes . The Indian government is providing a range of tax concessions designed to encourage research and development, including a 10-year tax holiday on income arising from research and development. (Lancet 2004)

Thus, TRIPs is increasing investment in the research and development of new drugs. It promotes economic growth of the Indian drug industry, because companies now have patent induced control over the price and availability of new drugs. India already has more pharmaceutical products approved by the United States Food and Drug Administration (FDA) than any foreign country, which is helping the industry to obtain and enforce patents. The Indian pharmaceutical industry will be able to increase its contribution to drug discovery and development, which, given the cost-effectiveness of research and development in India, can only increase. (BJU 2003)

‘TRIPs will cement India’s position as a global pharmaceutical outsourcing hub and offshore location for research and development and other support services including strategic services in patenting and related matters.’ India is also becoming an attractive location for the outsourcing of patent drafting . In addition to these benefits to the industry as a whole, TRIPs has also imposed higher quality standards for drugs and processing.

Proponents of TRIPs argue that patent induced privatisation of the industry will lead to growth of the domestic industry that will increase the availability of all biotechnology products to poor people i.e. diffusion. However, as mentioned before, patents can reduce the availability of new essential drugs by restricting short term diffusion. Thus, although TRIPs may encourage more research and development of drugs, these drugs will be less available to poorer people who cannot afford them at times when they need them most.

However, there are counter-arguments that TRIPs will not make new drugs unaffordable. For example, Shantha Biotech, which was first to launch the indigenously developed hepatitis-B vaccine in the country in 1997, has secured the World Health Organisation (WHO) certification for its product “Shanvac B” (now marketed at “Hepashield”). Shantha is the only company in India to get this certification for the hepatitis-B vaccine, and it is being provided at a quarter the price of the previously imported vaccine (Jayaraman 2001).

However, despite greater availability of a few specific drugs, linked to some Indian companies obtaining licenses, the price of new drugs over the next few years is likely to be relatively high in terms of what the population is used to and can afford.

4.2 Main Disadvantages

Under TRIPs, there will be more consolidation in the pharmaceutical industry, as larger companies are more capable of using patents to secure higher profits. Linked to economies of scale, these companies will be able to exploit the patent system to out-compete other companies. Multinationals such as GlaxoSmithKline, which already operate in India, will have a particular advantage. Smaller companies will be less capable of buying into the strict patent system. Merely securing a patent from America’s patent office costs at least $4000. Defending it in court can cost millions (Economist 2002).

Although TRIPs does not patent old drugs already on the market, there is still a backlog of products waiting for grant of product patents, some which may already be on the market, as product claim applications have been filed since January 1 1995. Unless Indian companies have stopped manufacturing such drugs completely, a large number of litigation and infringement suits will ensue .

TRIPs restricts India’s generic industry and longer patents provide additional incentive for foreign investment in India. This could actually pose a threat to India’s pharmaceutical companies. At an international level, Indian companies’ advantage in cheap vaccines for hepatitis or rabies may be eroded by potential development of cocktail vaccines that promise delivery of multiple vaccines in a single shot (Jayaraman 2003). Although TRIPs encourages growth of the industry and creates some large winners, it creates many losers.

Since the 1970s, India’s poor population has benefited from a range of drugs available at relatively low prices. The industry is efficient at making generic varieties and has a number of different companies able to produce such drugs, which means that new drugs on the market can be imitated both quickly and easily. This provides a means of sharing the benefits of technological advancement in developed countries with developing countries, usually isolated by a gap in technology. According to some reports, India is home to the fastest growing rate of new infections in the world (Hankins 2003). Without the benefits of generic drug production, the population of India could suddenly be faced with a health crisis.

According to a recent Times of India report; the price of cancer drug Gleevac has risen from to Indian Rs120, 000 ($2,590) from its price just a few months ago of Indian Rs4000 ($86.35) – 30 times more, because of TRIPs .

4.3 The Doha Agreement and Compulsory Licensing

TRIPs has a clause that allows governments to override patents and provide essential drugs to the poor in some circumstances. Working with Non Government Organisations (NGOs), Brazil and a group of African countries pressured policymakers to revise TRIPs. The meeting in Doha, November 2001, between the world’s trade ministers attempting to organise a new round of trade negotiations (Health Affairs 2004), led to the Doha “Declaration on the TRIPS Agreement and Public Health.” This declaration affirmed that TRIPS “should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all.”

‘It affirmed the right of nations to use the exceptions of TRIPS, such as the compulsory licensing provision, to meet public health concerns, specifically stating that “public health crises, including those related to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency” and thus facilitate the right to use compulsory licensing’ (World Trade Organisation Declaration 2001).

‘Governments can issue compulsory licenses to allow other companies to make a patented product or use a patented process under licence without the consent of the patent owner, but only under certain conditions aimed at safeguarding the legitimate interests of the
patent holder’ . For example, the Supreme Court of India may interfere to justify the dispensation of drugs at an affordable price on the grounds of concern for public suffering. They can grant a compulsory license for companies to produce a generic drug. If required, the government may also fix the price of these drugs as well as the royalties to be paid to the inventor for the remaining term of patent .

A further 30 August 2003 Amendment to the Doha Agreement enables governments to let their pharmaceuticals generically produce drugs for other countries, as well as their own people, in times of ‘acute suffering.’ Previously, Article 31(f) of the TRIPS Agreement stated that products made under compulsory licensing must be “predominantly for the supply of the domestic market”. (WTO Press Release 2003) This applied directly to countries that could manufacture drugs, limiting the amount they could export. It will now be possible for countries to import cheap generic drugs in times of ‘acute suffering’.

This was regarded as a victory by the developing world and as a defeat by the research-based drug industry.

However, there are serious questions as to whether compulsory licensing can even work. ‘No generic medicines have been manufactured this way in the past decade, treating no patients in any country worldwide’ (Attaran 2003). ‘Threats of compulsory licensing might be useful when rattling sabres with drug companies to lower medicine prices, but only a single (and unusually powerful) developing country, Brazil, has ever succeeded in doing so. As such, compulsory licensing or the threat of it has seldom had any practical effect for public health’ (Attaran 2004).

Nevertheless, the pharmaceutical industry in developed countries has objected, with the United States leading the objections. ‘America’s drug industry has fought tooth and nail to impose the narrowest possible interpretation of the Doha declaration, and wants to restrict the deal to drugs to combat HIV/Aids, malaria, TB and a shortlist of other diseases “unique to Africa” .’ This means that the industry is against the use of compulsory licencing, and only prepared to accept its use in Africa, which is very unethical when most developing countries do not have sufficient access to essential drugs. It highlights the ruthlessness of paharnceutical companies, in terms of seeking maximum profit even at the expense of the world’s health.

Compulsory licensing and the amendments to TRIPs are positive in respect to health care in developing countries. The changes suggest that governments do respond to pressure and there has already been some admission on their part that TRIPs could be revised under a more ethical framework. However, even with these amendments, TRIPs does not tackle the root problems of unequal power relations between developed and developing countries, which give rise to the unequal access to pharmaceutical biotechnology.

5. CONCLUSION

This chapter argues in favour of alternatives to TRIPs. It starts by summarising the benefit of increased public funding in research and development. It shows the close ties between science, business and government and goes on to explores wider policies, highlighting the ways that the scientific community can promote more ethical drug policy.

Public funding

If a larger proportion of research and development of new drugs was publicly funded, then this would encourage more investment into the development of essential drugs, which are needed in developing countries.

Data submitted to the Joint Economic Committee of Congress by the National Bureau of Economic Research reveals that public research, not private, led to 15 of the 21 most essential drugs introduced between 1965 and 1992, and other studies in the 1990s suggest that only a minority of important drug discoveries in recent years (estimates range from 17% to 40%) were the result of commercial research (O’Leary 2002). This shows that public funding is paramount to the production of essential drugs, and therefore to health in developing countries. The combined effect of shortening patents and increasing public funding in the pharmaceutical industry would ensure that not only are more essential rugs produced, but that they also reach those who need them.

The next section shows that scientists need to devote more attention to the unethical nature of drug policy and voice concerns to the public. This involves deconstructing a scientific agenda from the economic agenda of government and big business.

Governments, science and big business

Scientists ideally work to discover “truth” and gather knowledge to help people. Research and development, however, tends to be profit-driven, and there are conflicts between seeking scientific advancement and helping people, because helping people is not always profitable. Government policy supports the pharmaceutical industry, as strict patents favour the expansion if the industry and economic growth. Although business and governments are therefore dependent on scientists to design new drugs and technology, their common agenda allows them to exert political and economic control over science. Any social objective to deliver essential drugs to the poor is lost in this agenda. Scientific search for ‘truth’ therefore becomes a quest for profit, because of the vested interests of government and business.

The United States Office of Management and Budget reported that academia, in addition to federal funding, receives millions of dollars for research from donors and the private industry.

“Bioethicists at the University of Toronto take funding from GlaxoSmithKline, Pfizer and Merck to write editorials on bringing biotechnology to the developing world . . . Bioethicists at the University of Pennsylvania take money from Pfizer to write an article explaining why physicians should not accept gifts from companies like Pfizer. (Engler 2004) This shows the irony whereby large companies control information which should criticise their activities.

In the United States, even federal money comes with strings attached. Federally funded experiments and research are subject to massive amounts of bureaucratic regulation and oversight. Members of academia are now increasingly involved in the private sector. ‘This means that, even in basic research, funding is not free from profit motives or federal regulation, and the research is not necessarily a pure drive for more knowledge .’ Thus, it is hard to separate science from the profit motives of business and politics, which share a common agenda. Scientific information can be biased because it is conditioned by this agenda.

‘Today the most powerful players outside government are private corporations. They contribute financially to political parties in the US, Europe and elsewhere and a neo-liberal trade agenda has become the mantra of virtually all elected political parties. The price governments have to pay for this support is to ensure that their electoral platform corresponds quite closely to the agenda of big business.’ (Shutt 2001)

It is unfortunate that science, politics and business are so intertwined that it is difficult for the benefits of biotechnology and knowledge to jump the political and economic hurdles to reach developing countries.

It means that scientists need to be more vigilant about the type of drugs they help to produce, and what they endorse. Moreover, the scientific community need to play a more active role in raising awareness about pharmaceutical issues, so that people become more informed and capable of working with other groups, such as NGOs and members of the scientific community, to press governments for change. Scientists and the public can apply pressure to regulate the corporate sector, by imposing corporate social standards in the trade of drugs, and deconstruct those pressures from big business that controls science and information.

Public mistrust

Governments have cont
rol over science. They manipulate the science often finding a balance between where public support lies and where the money lies. This has resulted in public mistrust and scepticism in science. In the UK, for example, the public was informed by government that BSE could not be transmitted from cattle to humans, and the government promoted British beef and the industry for around ten years, before it emerged that there was a human form of the disease, variant CJD. Mistrust and scepticism was the result.

Scientific ignorance can also weaken the ties between science and the public. People may ignore the science because it is viewed as obscuring a larger picture (Michael, 1996). Science can be difficult to understand and, as mentioned, communication through the media reflects the agenda of business and government. If people do not trust the scientific media or understand the science of issues, their uncertainty can be compounded by a general mistrust of science and the scientific community. It is also important to consider that people also have different views on issues, which highlights the need for better communication and debate. New abortion procedures to people who are already pro-life are simply ‘more efficient ways to kill unborn babies,’ whereas to pro-choice advocates they are safer, less intrusive ways of protecting the choices and health of mothers .

People need to feel that a scientific organisation has no vested interests. This is why independent organisations for public scientific awareness and education are important to build up this trust. In Britain, this includes COPUS (Committee on Public Understanding of Science) run by the Royal Society. There is also the Wellcome Trust, which informs the public on science policy and practice (as well as contributing to researching social implications of sciences) “The culture of science needs a sea-change, in favour of open and positive communication with the media.’ If these independent scientific institutions, collaborating with NGOs and the scientific community, can succeed in informing and educating people, ‘it will pay for itself many times over in renewed public trust’. (UK Select Committee on Science and Technology 2000)

Agreeing with this line of thinking, if independent scientific organisations can give more attention to health problems in developing countries, then they can raise public awareness about these issues. The potential to change policy rests on a more informed public.

Individual scientists and the scientific community, collaborating with independent organisations, can debate ethical issues and highlight the importance of improving health in developing countries by increasing the availability of essential drugs. “Some of the favourite topics of bioethicists seem trivial compared with the important health issues facing people in the world’s poor countries and in impoverished regions in rich countries” (BMJ 2004). “The risk of dying from maternal causes in sub Saharan Africa is 1 in 16. In Western Europe it is 1 in 4000.” Bioethicists could focus their attention on the morality of a world system that allows “500 000 girls and women [to] die every year – 99% in developing countries – from preventable conditions and injuries related to pregnancy and childbirth.” (Lancet 2004)

It is especially important to make younger people more aware of the issues pertaining to the use of strict patents, in order to produce an informed public in the long term. Thus, there needs to be more attention to such issues in colleges and universities, as part of a curriculum, then younger people could debate for themselves the fairness of TRIPs. Again, a more informed public would be less likely to accept the ‘unfair’ policies enforced by their governments.

Therefore, policy must change. After all, it is the wider policies that enable corporations to exploit poorer people, who cannot afford to buy into technology. Roy Vagelos, the former head of Merck, claims that “‘A corporation with stockholders can’t stoke up a laboratory that will focus on Third World diseases, because it will go broke’ … ‘That’s a social problem, and industry shouldn’t be expected to solve it .’ Although biased from an industry viewpoint, he does make the point that companies are by definition profit motivated and that giving companies greater freedom is not in the best interests of health, especially poorer people.

Historical policy context

‘One cannot separate economics, political science, and history. Politics is the control of the economy. History, when accurately and fully recorded, is that story.’ (Smith, 1994). There are wider policies that need to be considered. Patents are a form of imperialism.

In the nineteenth and twentieth centuries rich, powerful states, including Britain and other European countries, exploited third world colonies. Richer states exploited the natural resources and workforce of the colony, and efficient supply chains were constructed for this purpose, based on unequal power relations. Although developing countries gained economic dependence in the 1960s and early 1970s, an economic dependence continued. Developed countries lent large sums of money to developing countries, and these debts became unpayable due to the rise in interest rates. Developing countries, instead of investing in health, still have to repay these debts, and they have become economically dependent on the companies and governments of developed countries, who control trade policy.

Thus, based on a historical trade policy context, governments in developed countries have the responsibility to help developing countries supply drugs to their populations.

‘Enormous agricultural subsidies ($310 billion) in developed countries deny the agrarian populations of poor countries the opportunity to export products and accumulate wealth’ (OECD, Paris 2002). The subsidies alone are roughly equal to the entire gross domestic product (GDP) of sub-Saharan Africa. ‘Redirecting just 1 percent of this government spending to global health would more than double the foreign aid spent to control HIV/AIDS, malaria, and tuberculosis combined.’

President Yoweri Museveni of Uganda opines that giving priority to medicine patents in trade negotiations has been a “red herring” and that “if there were no agricultural subsidies…we [Africans] would earn enough money to buy all the drugs we want” (Wall Street Journal Editorial 2003). Although I think that reducing agricultural subsidies is just one element of improving pharmaceutical infrastructure in developing countries, he makes a valid point that improving the distribution of drugs is linked to redistributing wealth between countries.

Kanji et al (1992) take this further to point out that a country’s pharmaceutical and health policy cannot be isolated from its general development startegy. November et al 1982 elaborates by stating that ‘dependence on products [drugs] and the agents and institutions which make them available, fosters the notion that the solution to illness resides in the purchase and consumption of medications rather than improvements in living condtions’ (November et al 1981).

I agree with this line of reasoning that links the unavailability of essential drugs in developing countries to wider policies, and highlights the need for more sustainable development that takes into account the vulnerability of the poor by imposing strict social criteria in drug policy and trade, rather than strict patents (economic criteria). It should be emphasised that shortening the time length of patents is one important factor among many that could improve the avilability of essential drugs and all round healthcare in developing countries.

Melrose, 1982, says that ‘companies should keep to their declared obligation of making sure that drugs “have full regard to the needs of public health” and demonstrate special social responsibility in poor countries by not advertising non-essential multivitamin tonics, cough and
cold preparations and expensive and irrational combination drugs (Melrose 1982).’ Although I agree that corporations need to behave more responsibly, this should be a legal prerequisite rather than an ‘obligation.’

Ironically, there is great potential and ability of the large pharmaceutical firms, which have been so criticised in this text, to develop more essential drugs for the poor. The private sector has a great deal of knowledge and capital, which can be used to produce new essential and non-essential drugs. Thus, although public funding would help to give priority to essential drugs, the private sector should still contribute significantly. This is especially the case in the foreseeable future because the private sector is largely responsible for the production of all new drugs. ‘If Pfizer, Merck, Glaxo-Wellcome, and other pharmaceutical companies do not develop drugs that plague developing nations then …there is a real danger that people in developing nations will become therapeutic orphans’ if the pharmaceutical companies lack the proper incentives to develop drugs for the developing world’ (Reich 1979-1981).

Thus, the final part of the conclusion looks at ways of regulating the corporate sector.

Regulating the corporate sector

Governments can regulate the pharmaceutical industry in two broad ways, either by direct control, usually by making legal requirements, or by creating incentives. A mixture of the two strategies can be effective.

Control involves regulating and monitoring biotechnology companies and pharmaceuticals through the creation of legal requirements. For example, when these organisations develop drugs/ vaccines, governments can mandate them to comply with research and manufacturing standards to ensure products are safe and efficacious . Governments can control drug prices furthermore because they often have authority over the granting and use of patents. For example, in the US, the government has the right to license drugs to other companies if the patentee does not make it available to the public on reasonable price and terms. Such a right is currently focused on drugs that have been developed with public support . It needs to extend to drugs developed with private support.

Although laws are paramount in regulating corporate conduct, there is the issue that corporations have no moral obligations over and above the requirement to comply with the law (Friedman 1970). Governments can, in this regard, create further incentives for these organisations to engage in developing drugs/ vaccines that benefit populations in developing countries. For example, it could create subsidies or offer grants for research in certain areas. The Orphan Drug Act, introduced in the US in 1983, creates tax and marketing incentives for those companies that engage in creating drugs for rare diseases. Also, governments could commit to purchasing future critical drugs/ vaccines in order to minimise the ‘private entity’s financial risk’ .

Ideally, TRIPs should be replaced by policy which curtails the power and influence of the private sector, by shortening the time length of patents, allowing generic production in developing countries, and at the same time increasing public funding of research and development.

In summary, making more ‘ethical’ drug policy is dependent on:

? International policies

– removing TRIPs, shortening the length of patents; allowing developing countries to generically produce essential drugs.

– subsidising research and development of essential drugs.

– regulating the corporate sector: ensuring that essential drugs are reasonable priced; ‘a price that allows the company to earn its money but also promotes accessibility and equity’ (Brody 1996) & (Spinello 1992).

? National policies

– providing funding and technical support for NGOs who raise awareness of the issues surrounding the use of strict patents in the pharm,aceutical industry.

– Promoting education in schools; collabortaing with independent scientific organisations to provide information publicly, through the media.

– Setting an example by increasing public funding in research and development; prioritising investments in essential drug production; greater transparency; governments more accountable to the public than companies.

– Campaigning for fairer drug policies at the international level

? Education and public awareness

– Informed people in developed countries, able to raise issues pertaining to the use of strict patents and resist ‘unfair’ policies.

? The role of the scientific community

– a scientific community that focuses more on third world issues and health problems, and raises awareness about the underlying policies that cause an imbalance in wealth and health.

– Independent scientific organisations that can communicate information to the public and collaborate with scientists and NGOs, and raise concerns with business and government.

– campaigning for ‘truth’ and sharing of knowledge, as well as more regulation of the corporate sector, and governments who are more accountable to the public.

This paper highlights the interconnectedness of social, economic and political factors which can improve the availability of essential drugs in developing countries.

To end on a more positive note, pharmaceutical companies have created life-saving drugs which have helped to save millions of lives, but these drugs have tremendous potential to save many more lives and alleviate suffering by helping to curb the incidence of various infectious diseases, which cripple the social and economic fabric of developing countries. The paper also highlights the importance of better understanding the impacts of TRIPs in developed countries, so that governments are pressed to change policies at the national and international level. The role of the scientific community is critical, in terms of having more say and control over drug policy, and helping to increase public awareness about drug policy. Ultimately, a concerted effort between the scientific community, public and NGOs can resist ‘unfair’ drug policy and some of the exploitative practices of pharmaceutical companies.

7. REFERENCES

Books/Journals

Attaran, A. (2003) Assessing and Answering Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health: The Case for Greater Flexibility and a Non-Justifiability Solution. Emory International Law Review 17, no. 2 (2003): 743–780.

Benatar, S. (2000) Avoiding Exploitation in Clinical Research. Cambridge Quarterly of Healthcare Ethics 2000; 9: 562-65

BJU (2003) Fitzpatrick (Ed) International Volume 92 No

MLM Ethics

Dr Robin Rushlo asked:

Are MLM/Network Marketing Businesses A

Honest Way to Earn Income?

The MLM/Network Marketing Business

MLM (Multi-Level Marketing) is based on the concept of distributing the process of selling onto independent businesspersons. Honest MLMs give everyone (and anyone) the opportunity to start and grow their own business. Consider that the MLM concept can be applied to selling every good and/or service, and that every person is a potential future representative. One can say that everything has the potential to become a MLM opportunity.

Think about where you work. Isn’t it true that the boss (or company) is raking in the big bucks out of the money YOU are making for the company? Maybe you aren’t in sales. You still contribute something of value to the company. If you didn’t, they wouldn’t pay you! Your paycheck is a reflection of that value. Whether you work in sales, for a nonprofit, or in the service industry, somebody somewhere is making money and you are contributing to that effort. If they weren’t making money, the company would collapse.

There are many good examples of traditional businesses that function very much like a MLM. Examples include the Insurance business, the Yellow pages guys, your local Auto Dealers, etc. Look at a sales force. The salesman makes a commission of 12%. That’s all he makes unless he makes his quota or sale goals and then he may get a bonus. The sales managers for these companies may have 10 salespeople to train, keep track of, and motivate. As reward for this extra work, he makes 3% of everything that each salesman makes plus commissions and bonuses for his own effort. He may make an additional bonus for all of his salesmen making their sale goals. And the owner of the company makes money on everyone!

Gee, that would mean Honest MLM is everywhere we just do not see it like a MLM company.

An Honest MLM versus a Pyramid Scheme?

Pyramid schemes are illegal scams involve a large number of people at the bottom of the pyramid, all of them paying money to a few people at the top. Each new participant pays for the chance to advance to the top and profit from cash paid by others who join down the line. You receive no products or services for your participation. Pyramids resemble a legal honest MLM in structure, but there is an important difference. Pyramid schemes seek to make money from you, while multi-level marketing seeks to make money with you by offering top quality products and/or services. Pyramid schemes are much like chain letters; they require mathematical gymnastics that cannot possibly work. Pyramids always collapse in the end, and only a very few (usually the con artists themselves) make any money on them at all.

Many people associate the MLM technique with pyramidal schemes. An MLM does not work this way. You must do work to earn money—it is as simple as that. The main objective of an MLM is to enlarge the area of distribution for different goods by involving as many people as possible, either as customers or as possible representatives. Each company representative earns their money through honest work. They may receive commissions for selling and may also receive a bonus for offering the business opportunity to others.

Anyone who works a conventional job is in a pyramid scheme. Every company, army, and government in the world is built on the pyramid concept. However, with multilevel marketing, you aren’t held back by the people above you like you are in a conventional job.

With an MLM, you can build your business as large and as profitable as you want and you do not need to be at the top. In fact, with many MLMs, you can surpass the earnings of the person that introduced you to the business.

How Can You Tell if an MLM is a Good and Honest Company?

MLM opportunities are all around us, but only a few of them are turned into profitable businesses. Be sure to make the most out of every honest MLM opportunity.

The Direct Selling Education Foundation suggests that, before you sign up with a company, you ask yourself these three questions:

1) How much am I required to pay to become a distributor? An honest MLM company will generally charge a small start- up fee. Pyramid schemes make most of their money from signing up new distributors, so their start-up charges are often very high. These start-up fees may be called many things and you may be told they are required or are recommended purchases for training, computer services and product inventory.

2) Will the company buy back unsold inventory? Honest companies will usually buy back any products that you fail to sell. Bogus companies will stick you with the inventory.

3) Are the company’s products sold to customers? Pyramid schemes gain nothing by actually selling a product and often don’t sell anything at all. They focus only on gaining new investors. Be wary if you must start by buying a large amount of product. Also, take a good look at the product itself. Multi-level marketing depends on quality products that are well-priced; pyramid schemes do not.

As with any other investment, before you commit ask questions about the company, its leadership, its ethics and its earnings. Take your time and investigate any information you’re given. Talk to other people who have joined and research the company. Don’t act hastily!

Ethics of the MLM

Many people question the ethics of MLM. They claim that the people on the top get all the benefit from the people working below them, while the people below don’t get much if anything at all. Nothing could be further from the truth! The main income for an honest MLM comes from selling goods or services. With an honest MLM, you can easily make more than the person that brought you into the company if you put the effort into it. He gets a little bit from your sales, but you get the lion’s share. Work equals money!

An honest MLM also focuses both on sales and on recruiting people (increasing the distribution system) to earn you more money. When a MLM representative contacts a person, he views that person as a potential customer and as a potential future representative. A representative will give you the opportunity to purchase his merchandise (which you were going to buy anyway) and to become a representative yourself, giving you the chance to earn money, grow your own business, become part of the company and share in the profits!

The recruited person benefits since he is now part of the company and is also the owner of his own business. Some benefits of joining the honest MLM can include products at a reduced cost and the opportunity to build their own business by selling and recruiting themselves. However, recruiting alone is not enough. You must recruit, motivate, train and supply the persons you recruited to get your share of their sales profit.

I Don’t Know How to Sell or Recruit!

If you do not know how, don’t panic! There are many honest MLM guides online. All the tips, tricks and the knowledge you need to start and grow a MLM company are available. The good news is that a lot of these are free.

Expand your business over the Internet. It is easier and cheaper. People are much more comfortable buying things from perfect strangers over the Internet, rather than buying them from total stranger at their doorstep. Save time and avoid stress by doing all your managerial tasks from your computer. Recruiting can also be performed online. As can selling.

The Future of Multi-Level Marketing

The home-based business boom, also know as MLM or Network Marketing, isn’t really booming at all. Now it’s true that in the last decade the number of MLM companies popping up all over the United State
s have grown by over 500%. Yet, the number of distributors has only grown by 15%! So, yes there is a “MLM Boom”, but it’s the number of companies that have boomed, not the number of distributors.

What does that mean? It means that there are too many companies competing for the same distributor base, plain and simple. Ever seen a small town “boom” really quickly only to go “bust” in a few years? You know the type I’m talking about. You drive through the town and see closed businesses and shopping malls all through the town and you ask yourself “what happened here?” Now, I’m not saying that the MLM industry is ever going to “bust”.

Quite the contrary, the MLM industry will continue to grow with or without you—it’s that strong of a business model. But, it’s not 1977 anymore where Amway, Shaklee and Herbalife are not the only games in town. Instead, there are literally thousands of “good” MLM programs to choose from. To grow a profitable MLM company needs work and dedication, but once you have it rolling, you will enjoy the benefits. Grab a MLM opportunity and make your first step towards your honest MLM Empire.

The Legal Aspects of Honest MLM

The Inevitable Question

OK, you have either been recruited for a network marketing opportunity or you are the one doing the recruiting. Inevitably, this question will come up: Is this a pyramid scheme or a legitimate business opportunity?

This Tuna’s for Selling

Although this is a complex legal area, a simple story draws a clear line in the sand. Party No. 1 sells Party No. 2 a case of cans of tuna fish for $10. Party No. 2 sells the same case to No. 3 for $20 and so on until No. 9 sells the case to No. 10 for $500. No. 10 opens the case and opens one of the cans, which turns out to be rancid. He goes back to No. 9 who refers him to No. 8 and so on until No. 10 goes to No. 1 to complain.

“I have major problem,” he says.

“So, what’s your problem?” says No. 1.

“Well,” says No. 10, “the tuna is rancid, it’s inedible.”

“So, what’s your problem,” No. 1 says again

And there lies the difference. Distributors in a network marketing program that are merely buying product to buy into the deal as opposed to an intention of really making a market for it, are really working a pyramid scheme, not a legitimate direct selling business. Remember, when you offer this opportunity to your next-door neighbor or your best friend, it’s your credibility that’s going to be on the line for years to come.

What to Look for – A Checklist

So, what do you look for with respect to legitimacy vs. pyramid? Here’s a good checklist to consider.

1. Product and Price

Does the company offer a high quality product for which there is a strong demand in the real world marketplace? Is the product fairly priced and priced competitively with similar products? Can the product be demonstrated, and does it stand out when you show it to friends? Is the product proprietary to the company, and available only through its distributors? (Have you ever noticed that you can’t buy Avon products in stores or Shaklee vitamins at pharmacies?) Is it backed up with a customer satisfaction guarantee?

Is post-sales service or customer assistance available? Do the people who participate in the program buy the product enthusiastically based on its own merits, even if they don’t participate in the compensation program?

2. Second, No Investment Requirement

Can you participate in the company’s program without having to make any investment other than purchasing a sales kit or demonstration materials sold at company cost?

3. Third, Look at Purchase and Inventory Requirements

Can you become a distributor or sales representative without having to fulfill a minimum up-front purchase or inventory requirement? (When you are pitched to put thousands of dollars of inventory at the very beginning, run fast in the opposite direction.) Does the company’s compensation plan discourage inventory loading? Garages and backrooms filled with product serve no useful purpose to anyone.

4. Fourth, Look at the Sales Commissions Sources

Are sales commissions paid only on actual products or services sold through distributors in the network to the end-user or ultimate consumer? (This means that products don’t end up in basements and closets. They are used, because they have genuine value.) Does the compensation plan avoid paying commissions or bonuses for the mere act of sponsoring or recruiting? (If it pays headhunting fees, it is illegal.)

5. Fifth, Check the Buy-Back Policy

Will the company buy back inventory and sales kit materials from distributors who cancel their participation in the program, as long as these items are in resalable condition? (This policy is required in states that have adopted multilevel distribution statutes.)

6. Sixth and Very Important, Look for Retail Sales

Is there an emphasis on actual retail sales to end-consumers? Can the company demonstrate efforts to market products to the ultimate consumer? Do the company’s distributors have ongoing retailing requirements to qualify for commissions? What is a “retail sale?” The industry and many MLM statutes include both sales to nonparticipants and purchases in reasonable amounts for personal use by distributors. Some regulatory groups, including the FTC, have historically rejected personal use as a legitimate retail sale. Stay tuned as this debate continues. The legislative trend is definitely supportive of the industry position.

7. Seventh, Expect an Active and not Passive Role for Distributors

Are distributors in the company required to actively participate in the development and management of their networks? (Many of the MLM statutes require that distributors perform bona fide, supervisory, distributing, selling, or soliciting functions in moving product to the ultimate consumer.)

8. Eighth, Watch Out for Earnings Misrepresentations

Do the company’s literature and training materials scrupulously avoid claims of income potential that is promises of specific income levels other than demonstrations of verifiable income levels within its program? (The Federal Trade Commission, attorneys general, and postal inspectors all have their eyes on the matter of earnings representations. The acceptable approach emerging is that there should be no earnings representations unless they are based on a verifiable track record of the average earnings of distributors. For instance, a company should have statistics to show the percentage of active distributors and the average earnings of active distributors.)

9. Finally, Look for Good Training

Does the company offer its independent distributors solid training opportunities in sales and recruitment? Are different levels of training offered to match the increasing levels of experience and responsibilities of distributors?

Authored by Dr. Robin Rushlo

Copyrighted May 2006

Rights owned by Soaring Eagle Companies LLC

No Net Needed

Blindguy55

May not be sold in any form or for any gain

Of any kind

File Sharing Ethics

Jason Cole asked:

Ever since the invention of the internet, people have used it to share files. Be it music, movies, video games, and other copyrighted and non-copyrighted electronic material. This has raised some interesting ethical issues. The debate over whether file sharing is legal and right is one of the most important issues dealing with the internet right now, and has sparked many lawsuits. Some of these lawsuits have even reached the United States Supreme Court. Today we’re going to be looking at both sides of the coin, the case for file sharing and the case against file sharing. You may decide yourself which argument you’re going to side with. And hopefully after reading this article you’ll be informed enough to make a decision.

The Case For

Many people that do share files over the internet believe that it does not cause anyone any harm, and in fact helps the industry who’s files are being shared. They believe that it allows the consumer to sample the product before purchasing the product, thus gaining the artist exposure that they wouldn’t normally have access to. There’s also the issue of file quality, as most files being traded are compressed and otherwise untrue to the quality of the original content. That and the fact that most of the time you cannot get materials like an instruction manual or DVD bonus features, which forces you to go out and buy the original, if those materials are of interest to you. Another argument for file sharing is that some people believe that CDs are far too expensive, and consumers who only want one or two songs should not have to pay the entire cost of a CD. Plus another justification for file sharing is that the companies from which the intellectual property is being stolen are large and generate high profits, and can thus afford the price of some copies being obtained illegally.

The Case Against

The case against file sharing is pretty simple. Some people believe that the music and other files that are downloaded are the work of the artist who made them, and is not public property. When people share files, one song that someone shares can be downloaded by another person and shared by them, then two copies can be shared and the process repeats to effectively create thousands of digital copies of a song from the one original file. Thus the band that recorded the song does not get paid for any of the thousands of illegal copies that were made. They believe that the effects of file sharing domino down the line and ultimately affect the salaries of all people involved with the production of the media in question.

So, in the end, the decision to share or download files online is up to you. Please beware that right now downloading and sharing files is illegal and you can be prosecuted. This being said, most people that share files are not prosecuted, and it seems that the government is looking more towards the actual file sharing networks (P2P) instead of single users. The most noticeable case was when the recording industries brought down Napster in 2001, and since then they continue to pursue the P2P networks.

Why Buy Fairtrade And Ethical Bags?

Indiann Davinos asked:

Why were the quintessentially English clothing company Mulberry selling African Bags? And what part do bottle tops play in the battle against Aids?

Bottle-top bags may sound like an idea straight from Blue Peter, but Mulberry’s version is miles away from double-sided sticky tape and coat hangers. The bags, crafted in Africa from recycled wire and bottle tops are lined with luxurious Congo leather, contrasting perfectly with their eye-catching, deconstructed image. And these bags are not just the latest fashion accessory, but an inspired way of raising money for Action Aids HIV/AIDS campaign.

Mulberrys non-profit bags are the focus of their campaign to halt the rising tide of people infected with HIV/AIDS. The company hopes the bags, retailing at 99 pounds, could raise as much as 100,000 pounds. And just in case you find you have nothing to wear or your budget doesn’t quite stretch to the bags, they have also brought out bottle top campaign T-shirts and key rings. Susan Mears of Action Aid is thrilled with the scheme, This is a dream come true project- the money will come in very, very useful.

DEATH SENTENCE

40 million people worldwide are infected with HIV/AIDS, and the majority of them are young: between 15 and 25. The International Aids conference in July warned that in 30 African countries average life expectancy by 2010 would be 27 years of age. Karen Stanecki whose branch compiled the report for US Aid, told The Guardian these levels have not been seen since the end of the 19th century. Many of those dying today from Aids are financial providers, whose deaths leave poor families destitute- 14 million children have lost one or both parents to Aids.

The greatest obstacle to controlling Aids is the stigma surrounding it. In many cases people with the disease are shunned. Prisca, HIV positive for twelve years, has lost her husband, two children and three siblings to AIDS related illness and has been ostracised for speaking out about the disease, Up to this very day, I dont speak to my sister. She says I have tarnished our family name, she told Action Aid. This attitude can obstruct education, the most effective way to prevent the rate of infection rising.

Uganda is one of the few countries to subdue its Aids epidemic. The mobilisation of communities and a willingness to confront the epidemic led to falling prevalence rate. This is largely due to 5,000 projects throughout the country tackling the problem. Educating women and girls is essential in cutting the rate of infection. Unfortunately girls are often removed from education to care for relatives with Aids. In the last 5 years the number of women and girls infected has risen by 40% according to Oxfam.

Cameron, the son of Mulberry chairman, Roger Saul, experienced Ugandas effective education strategies first hand while teaching sexual health education for Students Partnership Worldwide. Anxious to find ways to support the charity, he found inspiration on the arm of a village girl: a bottle-top bag. He believed, once Mulberry-fied, the bag could raise the profile of Aids awareness. The attraction of the bags is partly their novelty, which he hopes will get people asking questions – theyre a fun way to engage people with the serious issues of AIDS/HIV. His father, Roger, visited him in Uganda and was equally pleased to have found such an original way to help the 14,000 people who are infected everyday.

FASHION CONSCIENCE

Action Aid plan to spend the money in Kenya, looking after the 730,000 children who have been made orphans by Aids and the more then 2 million who are currently living with the disease. The charity has fifteen years experience of pioneering prevention and community based care. They believe the best ways to change peoples attitudes and counteract the secrecy and ignorance allowing HIV to gain so many new victims is through loca groups. They support them through training, resources and advice to ensure the people most affected by the disease are at the centre of developing effective responses to the epidemic. SPW will also receive some of the money to allow them to continue to train students to give sexual heath education.

In East Africa, where the bags are made, there is another reason to celebrate. Not only are the bags created from recycling wire and bottle-tops and so are environmentally friendly, but Action Aid pledges the workers who create the bags are both paid and treated fairly. Let’s hope Mulberrys bags set a trend for fashion without victims.