Based on below report of Pharmaceutical Industry provide 4-5 recommendations based on Kantian and Utilitarian theory.

Executive Summary

The topic discussed in this project will be Valeant Pharmaceuticals. From what we can gather the main issue was that Valeant Pharmaceuticals was price gouging its customers, all for the sake of having a good stock price. This article explained the journey that the company went through while also mentioning the major stakeholders in this case. The stakeholders are William Ackerman the founder and CEO, Gary Tanner an executive that was charged and arrested for committing fraud, the American government, Joseph Papa the new CEO, the shareholders, Bausch & Lomb is an eye care company that Valeant bought. If we were to specify 3 stakeholders, it would be William Ackerman, the American government, specifically the prosecutors, and Gary Tanner. The American government is the stakeholder in making the decision to go after Valeant, and Gary Tanner's decision to run a fraud scheme is what led to the consequences of Valeant going down.

Pharmaceutical Industry

The Pharmaceutical Industry was started in the 16th and 17th centuries in Nnberg, Germany when scientists started making a list of drugs and chemicals. In 1617 the group of pharmacists made separate identification for themselves, and London Pharmacopoeia was made mandatory for England and was the world's first Pharmacopoeia. (Dailey,2018)

The Pharmaceutical industry of Canada is a group of companies, many medications and over-the-counter drugs are made by them. Many sub-sectors are linked which provide services to different segments in the market.

Sales of Pharmaceuticals in the global market share is 2.1% and has been positive 5.1% since 2015. It has a total of 29.9 total sales for the year 2019. (Government of Canada, n.d.)

Key Stakeholders

Key stakeholders are shareholders, William Ackerman the CEO and founder, the American government, Gary Tanner the executive, and finally the customers. The shareholders are stakeholders because everything done by the executives is for the sake of the shareholders and increases the worth of the shares. William Ackerman is a stakeholder because he was the founder of the company, and he decides where the company funds go. The American government is a stakeholder because they are the one charging and prosecuting the company specifically charging Valeant Pharmaceuticals executive Gary Tanner with fraud, who is also a stakeholder because of the influence his position holds in the company, "Former Valeant executive Gary Tanner is arrested and charged with running a fraud-and-kickback scheme" (CBC, March 2017). The final stakeholders would be the customer, the reason why they are stakeholders is that they are being screwed over, by being price gouged and not being able to afford medication made by Valeant Pharmaceuticals.

The Ethical Choice

Situation

Valeant Pharmaceutical is one of Canada's largest manufacturers of drugs and medicines based in Quebec. The company was registered against many scandals and was accused of changing the pricing of many drugs earning a high percentage of profits. U.S. prosecutors investigated the company's distribution program. The company was also questioned when it did not disclose its quarterly earnings in October 2015. It was dealing with Philidor where they did not disclose their relationship and used them to market their products including frauds.

Shares were continuously falling over the years and Bill Ackman supported the Valeant's by buying their 2 million shares which later after the arrest of Garry Tanner (former executive of the company) Ackman suffered a loss of $3 Billion in March 2017. ("The Rise and Fall of Valeant Pharmaceuticals," 2017)

This was a big issue which the company did, prices rose to 3,000% high and tried to fraud the government by not providing true financial information. The consequences were that shares were plummeting down in 2017 and people lost their trust in the company.

Final Decision

The company is still up and running after its shares went down to an all-time low with multiple cases against it. Valeant Pharmaceuticals rebranded its name to Bausch Health Companies (BHC) in 2018.

''BHC will be a pharma business with an estimated net debt of $14.6bn'' (Osman, 2021)

Theories

Utilitarianism

According to the Utilitarianism theory, this was not ethical because this theory means doing the correct thing where happiness depends on most people, the end result that matters to everyone. In this case, what the company did was for their own benefit which at the end resulted in unhappy stakeholders because the price of shares dropped to a low level thus, they lost their money, people who trusted the company also lost their trust and the company itself was unhappy and had to face consequences. Because of high prices, the insurance companies and the patients were also not happy.

Kantian Theory

The Kantian theory is all about doing the right thing all the time, where individuals must do what is ethical. Here, in this case, Valeant did not do the right thing, they used the others to maximize their profits which is totally unethical.

Group's View

We believe that the company should adopt the Kantian theory since they have rebirthed the company. By implementing the Kantian theory, the company only has to worry about doing the right thing and running the business, they would not have to worry about anyone's happiness.

Qualitative Analysis

For the shareholders they lost value in their stock from all the fines paid and the damage done to the reputation of the company (Marowits, 2018). Gary Tanner was highly affected by this outcome because he was the one that was arrested for the fraud scheme that he ran. The American government is a major stakeholder because they are the one that enforced the investigations and the sentencing of Gary Tanner. William Ackerman's wealth was affected because he had to sell his stake in the company which came at a three-billion-dollar loss to him (CBC,2017). Finally, the customers who were forced to pay a large amount of money for the drugs that they needed will finally get the justice they deserve.

Quantitative Analysis

The share of Valeant Pharmaceuticals went down thirteen percent (CBC,2017) which was a new low because of the case that came against the executive Gary Tanner for running a fraud scheme. So, in order to raise more capital, the company sold all of its skin care products including any other company they had interest in. They were able to raise about two billion dollars to cover the cost they took from their shares going down, but the reputation of running a fraud scheme and price gouging customers made it hard to fix the company's reputation. Valeant's shares started to go up when the company stated it would reorganize itself with a new CEO named Joseph Papa. The company was able to buy an eye care company named Bausch and Lomb for one-hundred ninety-two million dollars. Some of the long-term consequences was that the company had to rename itself from Valeant to Bausch Health Companies. Last year Bausch Health Companies had to pay close to forty-five million dollars for the past transgressions of Valeant Pharmaceuticals (Pagliarulo,2020).

Recommendations

We recommend that the company adopt the Kantian theory as a base model for ethics, and that they keep all financial statements transparent while looking at the prices of their competition, so that they avoid any form of price gouging. Also, to help restore the company's image Bausch Health Companies can try donating to charitable causes, specifically those related to health.