...Case Incident 2 WHISTLE-BLOWERS: SAINTS OR SINNERS? Corporate whistle-blowers, individuals who report company wrongdoings, are often lauded for their courage and integrity. For example, one famous whistle-blower, former Enron executive Sherron Watkins, was named by Time magazine as one of 2002’s Persons of the Year. Given that whistle-blowers face unemployment, and, often times, ridicule from their company, many people do not come forward to report illegal activity. To encourage whistleblowers, the whistle-blower law, adopted in 1986, pays informants as much as 30 percent of legal fines reaped during lawsuits. With settlements often exceeding $100 million, whistle-blowers can sometimes see huge payoffs. Some experts are concerned that these payoffs are creating a culture where employees quickly report wrongdoings instead of trying to rectify the situation internally. Douglas Durand, for example, was a former vice president of sales at TAP Pharmaceutical Products. In 1995, he began to suspect that TAP was conspiring with doctors to defraud Medicare. Pharmaceutical companies routinely provide doctors with free samples of the latest drugs; however, Durand believed that TAP was working with doctors to bill Medicare for the free drugs, a practice that is against federal law. Later that same year, Durand became more worried when he discovered that TAP had decided to pay a 2 percent fee to individual doctors to cover “administrative costs”—a kickback in Durand’s opinion. Durand...
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...Abbott Laboratories—Equity Method Investments Teaching Notes: This case shows students how the equity method of accounting works. Abbott Lab’s footnote disclosure includes simple financial statement and income statement information for the joint venture. This provides a textbook example of the equity method. The case asks students to consider the effect on Abbott’s financial statements had the company reported under IFRS, which allows firms to select between equity method and proportionate consolidation when accounting for joint ventures (entities with joint control). Creating pro forma financials is a useful skill not only to reflect potential IFRS conversion but to enable meaningful comparisons across reporting jurisdictions. Thus, even if the SEC does not require IFRS for domestic registrants, students will benefit from studying non-GAAP reporting requirements. The case starts with the economic and business reasons behind joint ventures. Our teaching philosophy is that accounting does not happen in a vacuum – it is the language of business. We take every opportunity to have students consider the economics of the transaction first and then apply accounting rules. This is good practice for students who will have to make increasingly many judgments with the coming of principles-based accounting. Students have little trouble determining how Abbott Laboratories accounts for its 20-50% owned subsidiaries. They find it much more challenging to trace the effects thereof through the...
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...Sears The Sears case is one of many multimillion companies who were trying to survive back in the 80’s while facing the new era of many distribution companies like Wal-Mart. They designed a commission program for the auto division in an effort to gain market share that included the mechanics and the service advisors. The goal was to sell an amount of front-end alignments or brake repairs during their shifts. Many customers were fixing their cars after this commission implementation because of Sears’ employees’ recommendations however the repairs weren’t necessary. Consumer affairs conducted an investigation finding unnecessary repairs due to consequences of Sears’ compensation system. The president took certain responsibility, but he denied any fraud; they eliminated the advisor commission and designed a system based on customer satisfaction however the mechanics’ compensation remains the same. Congress received a letter from a Sears’ employee stating that the majority of the inspecting employees were still being paid with the same commission structure. However, the mechanics were receiving another incentive for every hour of work completed; the more work performed, the more money earned. However, the mechanics could be cutting corners to get more work done or they could recommend unnecessary repairs. The main factor contributing to the unethical conduct was the advising of costumers on unneeded repairs for the sole purpose of commissions; attached to a compensation program...
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...INDIAN PHARMACEUTICAL INDUSTRY – AN OVERVIEW 1. Overview The Indian Pharma industry is one of the fastest growing sectors with approximately 20,000 manufacturing units. The industry that is highly price sensitive ranks thirteenth in the global pharmaceutical market in value terms and fourth in volume terms. The country has tremendous export potential in the areas like custom synthesis, R&D, clinical trials, and Bioinformatics. The industry produces 60,000 finished medicines and roughly 400 bulk drugs, which are used in formulations with about 20% of the manufacturers in the bulk drugs segment. India has approximately 1% share of global pharma industry, which is worth US$406 billion. This implies that there is a huge market waiting to be unfolded. The figure below explains the evolution of Indian pharmaceutical industry: Figure 1: Progress Of Indian Pharmaceutical Industry Source: Pharmabiz.com (Article by Dr. Laxman Prasad) 2. Industry Structure and Size 2.1 Industry Structure The Indian Pharma industry is highly fragmented and can broadly be classified in to two categories: organized and unorganized sector. Figure 2: Revenues of Organised vs. Unorganised Sector Source: Secondary Research The organized sector contributes about 70% of the total revenues and consists of 260 units in both manufacturing as well as formulation segment. This sector can further be divided into Indian and multinational companies. The unorganized sector is...
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...in their skin. An advantage of this behavior is that the Whistleblowers feel a deep satisfaction making a substantial contribution toward the welfare of society. Of course, personal gratification isn’t the only benefit of becoming a whistleblower. For example, in qui tam cases under the federal False Claims Act, Congress decided to give whistleblowers (or “relators”) a share of the recoveries that result from their lawsuits to encourage people to step forward and take the risks involved in reporting fraud (Qui Tam Team). An overall advantage of whistleblowing is that the welfare of customers and employees can be protected. Blowing the whistle can take a long time and therefore can be very stressful. Families, friends and especially colleagues might not understand the decision and lose patience and trust very quickly. Without someone supporting you, the time until the case has finally settled, could be a hard one. Whistle-blowers have federal protection against recrimination. Regardless, it’s very likely that you will lose your standing in your chosen profession by the insidious practice of blackballing (T.A. White, 2010). Financial loss could occur, if the Whistleblower’s reputation is damaged by the case. The ethical behavior of Douglas Durand and Federal Government Douglas Durand had to go through an ethical dilemma as an executive employee. Most ethical dilemmas involve a conflict between the needs of the individual versus the needs of the organization (R.L. Daft &...
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...Cracks in the Pharmaceutical Supply Chain http://www.cio.com/article/print/16565 Print Article Close Window From: www.cio.com Cracks in the Pharmaceutical Supply Chain – Susannah Patton, CIO January 15, 2006 As an undercover agent with the Drug Enforcement Administration and the Food and Drug Administration, Aaron Graham saw firsthand how counterfeit drugs can slip into the pharmaceutical supply chain. Graham, now VP and chief security officer for Purdue Pharma, once posed as the manager of an "institutional pharmacy" selling drugs at a discount to secondary wholesalers who were then supposed to sell them to nursing homes. Soon after he began, his phone started ringing. Dozens of smaller pharmaceutical wholesale companies were calling, desperate to buy his drugs. These secondary or "gray market" wholesalers scour the country and the world for low-price drugs they can sell back to major wholesalers for a profit. In addition to trawling for institutional pharmacies, some secondary wholesalers have been known to purchase counterfeit drugs from criminal organizations in places such as China, Thailand or Colombia. Graham, who was part of a two-year FDA sting operation known as "operation gray pill," helped expose a system in which large and small wholesalers were taking advantage of multitiered pricing in the industry. Prescription drugs are sold at discounts to subsidized groups such as nursing homes and also exported at lower prices. Graham and his colleagues found...
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...free to a percentage of the costs that the government finally get thus of the court case. The qui tam supplies have been used with increasing occurrence in current years to start court case against pharmaceutical producer for deception that these companies have supposedly committed against federal and state health care programs. This paper tries to clarify the effects that these whistleblower court case have had upon the health care industries. This paper also suggests traditions that the False Claims Act and government enforcement efforts could be rehabilitated in order to decrease both playful qui tam court case and require for such wide False Claims Act trial History of the Whistleblower Provisions of the False claims act The False Claims Act (“FCA”) is one of the strongest tackle the government possesses for fighting fraud adjacent to the United States. As the government may bring suit to improve sufferers from deception without collaboration from private people, the FCA also approve private people with non-civic information relating to the deception to bring suit on behalf of the government. These whistleblower (or “qui tam”) suits allow the applicant to get a proportion of the revival for the government, that proportion changeable depending upon whether or not the government itself interfere in the suit. By give power to private persons to start FCA court case and pledge them a part of the government’s revival, the government is capable to penalize...
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...in the Zimmermann patent and had also directed Natco Pharma to stop selling their drug Veenat, in Europe [4]. Veenat involved the use of Imatinib Mesylate and was infringing upon their European equivalent of the Zimmermann patent[4]. Hence, the court declared that only the second invention of the formation of the beta-crystalline form could be actually termed as an “invention”. Once this was done, Novartis had to pass the bar of calling its invention a “patent”. Section 3(d) of the Act clearly states that discovery of a new form of a known substance must result in some enhancement in efficacy. Unless accompanied by an enhancement in efficacy, it cannot be classified as a patent. Novartis claimed that the known substance in this case was Imatinib as disclosed in the Zimmermann patent and not Imatinib Mesylate. However, the Court rejected these claims as they contradicted the oral and written statements given by Novartis and concluded that...
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...Strategic Management-2 Case Study Synopsis Of Case:-1) Competitive Advantage in new patent regime 2) Strategic leadership and competitive advantage 1) Competitive Advantage in New Patent Regime: A Study of the Indian Pharmaceutical Industry In the global business environment, traditional factors e.g labour costs and superior access to financial recourses and raw materials can still create a competitive advantage in the current competitive landscape. In the current landscape, the recourses, capabilities and the core competencies in the firm’s internal organization likely have a stronger influence on its performance than do conditions in the external environment. The IPI is one of the largest and most advanced among the developing countries. It is the 4th largest by volume i.e. around 8 percent and 11th largest in terms of value i.e. around 1.5 percent. The Indian pharmaceutical industry is a heterogeneous mixture of firms split between the organized and unorganized sectors. The control and support of the Indian government plays a critical role in the competitiveness of the IPI. According to Sampath (2006), areas of government support critical to the IPI include speed of processing of patent applications, R&D conducive environment, and reduced price Control, access of land for expansion and the patent amendment act, 2005. The government can also help increase the potential of the nascent venture capital industry in India, with an emphasis...
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...The Pharmaceutical industry in India is the world's third-largest in terms of volume and stands 14th in terms of value. The Indian pharmaceutical industry has become the third largest producer in the world and is poised to grow into an industry of $ 20 billion in 2015 from the current turnover of $ 12 billion The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s, and with the Patents Act in 1970.[5] However, economic liberalization in 90s by the former Prime Minister P.V. Narasimha Rao and the thenFinance Minister, Dr. Manmohan Singh enabled the industry to become what it is today. The lack of patent protection made the Indian market undesirable to the multinational companies that had dominated the market, and while they streamed out. Indian companies carved a niche in both the Indian and world markets with their expertise in reverse-engineering new processes for manufacturing drugs at low costs. Although some of the larger companies have taken baby steps towards drug innovation, the industry as a whole has been following this business model until the present. The number of purely Indian pharma companies is fairly low. Indian pharma industry is mainly operated as well as controlled by dominant foreign companies having subsidiaries in India due to availability of cheap labour in India at lowest cost. In 2002, over 20,000 registered drug manufacturers in India sold $9 billion worth of formulations and bulk drugs. 85% of...
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...The global pharmaceutical industry has grown rapidly over the last few decades. In 2001 it was estimated that its worldwide revenue was 390 billion US dollars, in 13 years this figure has increased significantly to just over 1 trillion US dollars. “Revenue of the worldwide pharmaceutical industry” (2014) it is currently facing its toughest outlook to date with both biotech and pharma sectors starting to sink. This is a very high risk industry and there are many factors that can affect it. PESTEL analysis is a tool used to analyse and monitor the external marketing environment factors that have an impact on a business. Porters five forces states that “the structure of an industry and the ability of firms in that industry to ace strategically depend upon the relative strengths of five forces: current competition, potential competition, the threat of substitute products, the power of buyers and the power of suppliers” Ian Worthington and Chris Britton (2006) By using these tools there will be clear evidence of the strengths, weaknesses, opportunities and threats that a currently effecting the pharmaceutical industry. The different sectors such as conventional, biopharmaceuticals and vaccines have slight differences when using the porters five forces tool, these will also be looked at in the industry life cycle and determined their place Pestle analysis looks at the likely changes in the six factors...
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...measurement to improve decisions regarding the entry of Walgreens into the German market. The framework for the competitor analysis is based on the concept of ‚Porter’s Five Forces’. Porter identified five competitive forces that shape every single industry and market. These forces help us to analyze everything from the intensity of competition to the profitability and attractiveness of an industry. Figure 1 shows the relationship between the different competitive forces. | Figure 1: Porter\'s five competitive forces | Threats of new entrants and barriers to new entry Germany has made some restrictions regarding U.S trade and investment and the government has established formal barriers. It is therefore the case that foreign companies have a harder time to enter the German market because of the government restrictions. Government institutions need to verify the safety and quality of the products and companies need invest more for that reason (Strong, 2013). The bargaining power of suppliers According to M. Porter (2008) the threat of bargaining power of suppliers occurs when there is a limited number of suppliers for a certain industry and if the supplier’s revenue does not heavily rely on the industry. The supplier gains power in terms of price setting as the industry depends on the supplier. In the computer industry for instance manufacturers of computers rely heavily on the supplies of Microsoft because there are only a few operating...
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...Merck’s Business Environment MNGT/521 University of Phoenix November 7, 2011 Kevin Wilhelmsen Merck’s Business Environment There are many factors a business, such as Merck, must have in order to be successful, for example strong financial statements, leading technology, and globalization. With the help of income statements, balance sheets, and cash flow statements, a financial analysis can be applied in a wide variety of situations to give business managers the information they need to make critical decisions (Financial Analysis, 2010). They also provide information in regards to the financial health of a company. Pharmaceutical companies are using technology to conduct clinical trials, which has proven to be beneficial to research, development, and the introduction of new products. Globalization is also important for Merck when it comes to product distribution. Outsourcing was been adopted by Merck in order to produce equal quality vaccines and medications at a cheaper cost. Review of Finances Analyzing a company’s income statement, balance sheet, and cash flow is a prime way in determining their success. A comparison can be made between the competition in the industry and a leader can be established. An analysis can also show which company is spending more on research and development and in turn, producing better products. After review of the income statements, Merck’s worldwide sales were $12 billion...
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...rinsed down the sink? While looking at many of the current articles related to environmental health, I’ve learned that we, as a whole, are ruining our water supplies for the future. We have continuously flushed whatever we don’t want to deal with into our sewer systems. The toxins, mostly from cleaning supplies and body treatment products are being reintroduced into our water sources. The waste water treatment facilities are efficient in removing the organic waste from the water supply, but they are not active in removing chemicals, and nutrients from the water table. I would like to discuss a few things that everyone should know about our waste water treatment facilities and what we can do to protect ourselves from being poisoned by our tap water. First, I would like to go over a few of the intricacies of our wastewater facility in Chillicothe. Second, I am going to discuss the chemicals, nutrients, and hormones that are occurring in our supply water due to the lack of regulations and filtration of our wastewater facilities. Third, I am going to discuss a few ideas that may aid the problem. Let me begin by first describing the waste water treatment process in our Chillicothe area. The Easterly Chillicothe Waste Water Treatment Facility is the subject of my studies because it affects most of us here today. Waste water is drained into the sewer by everyone living in the eastern side of the city. The sewer is perhaps the most important part of our water system today. This...
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...Vertex Pharmaceuticals: R&D Portfolio Management Case Report A Project Management Office, is a group or department within a business, agency or enterprise that defines and maintains standards for project management within the organization. The PMO’s objective is to standardize and introduce economies of repetition in the execution of projects. PMO’s mission is to reduce the risk of projects failing to deliver to time, cost and quality targets and to make more efficient use of project resources by using a “shared service” and improve corporate capability to launch products. ------------------------------------------------- Challenges in implementing a PMO * Formalization of PMO faces the issue of change implementation, which might disrupt already existing informal practices within the organization. * Finding executives with domain expertise and project management skills. * Obtaining complete and sustained top-management support for authority. * Managing a diverse range of related and unrelated projects to achieve the maximum organizational value within resource and funding constraints. * Deliver immediate improvements in project performance and justify the cost * Lack of standardized reports and reporting frameworks for all projects. * Manage the conflicts between new business critical initiatives and operations with incremental changes in the existing system. * Handle conflicts between line managers and project managers. ...
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