Read the News Note on page 573 Joseph Pereira and Joseph Rebello in Chapter 13. The company states that only 4 lots (118,000 vials) were sold that were contaminated with relatively benign bacteria. However, in January 1995, Copley informed the court that it is possible that there may be over 10,000 adverse reaction reports.

a. In the health-care industry, why does the matter of quality control involve ethical considerations as well as cost considerations?

b. For this company, are the standards of quality set internally or externally? Explain.

c. Why do you think Copley might be slow to improve its quality control procedures?

d. If Copley tracks spoilage costs, do you think its recorded costs of spoiled products would be higher or lower than those of the most quality-conscious drug makers? Explain.

e. If operating in such a manner is profitable for Copley, what does this suggest about the penalties for poor quality control in the generic drug industry?

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