Reference no: EM132154882

You are the CEO of Pharma Co, Inc. (“PharmaCo”), a multimillion dollar company engaged in the business of developing and selling pharmaceuticals. You have just received a report concerning PharmaCo’s best-selling drug, ZitNoMor, a successful treatment for severe cases of teenage acne. The report states that a major chemical substance used in ZitNoMor, hydroxopene, has been found to cause irreversible liver damage to 100 of 150 otherwise healthy teenagers in a 2016 study conducted by Harvard Medical School over a two-year period.You are also aware of a prior study, commissioned by PharmaCo several years earlier, that found hydropoxene harmless.

You believe that ZitNoMor can be manufactured with a substitute compound, but at a substantial cost to the company, and by extension, to consumers. You also believe that if word of the Harvard Report gets out, panic will likely set in among PharmaCo’s employees (many of whom live in the surrounding communities of Ridgefield and Frothingbrook) and shareholders. In 2017, sales of ZitNoMor accounted for 49% of PharmaCo’s profits.

What do you do? Answer the problem, taking care to address:

1. all relevant facts;

2. all the possible stakeholders affected by your response; and

3. the ethical theories, as far as business ethics and the social responsibility of business, that support your answer.