Business Ethics - Blood Money - Social Issues

Plasma International Company, Tampa, Florida, USA

This company was founded in 1986 by a successful stockbroker. Throughout the world, there is an acute need for uncontaminated blood and blood plasma. It was thought of as a good business opportunity by the founder and his partners in the business. Initially, the blood purchases was through storefront operations from people who were mostly poor and who used the money received for buying food and wine. In India, even today, most blood collected by hospitals are from poor professional donors. They get some money, milk, banana and some sweet bun/bread after the donation. Unfortunately, many samples were found to be infected with Hepatitis, called Jaundice in India. In today's context the threat of HIV/AIDS infection exists. Plasma International looked for alternate source of safe supplies and engaged medical and biological consultants. The business was fully legal and all clearances from respective departments and governments were obtained.

These consultants found that certain very poor tribes in Western Africa had blood characteristics which was ideal for donors. The company bought blood from such poor tribes at 15 cents a pint and some trinkets. The blood was then imported to Tampa and after processing, was sold to those who needed blood at USD 25 per pint. This came out into the open, when this company exported 10,000 pints of blood to Nicaragua, when that country experienced a disastrous earthquake and needed blood supplies badly. When the founder was questioned by the press reporters on the exorbitant prices, he refused to answer them citing the proprietary nature of costing of products.

Ethical and Legal Issues on the above:

Is trading in blood, for profits, a legitimate business activity ?
If yes, who should be authorized ?
How much profits should be allowed ? Who checks the costing ? Will such an item come under proprietary nature ?
Who ensures that the blood is uncontaminated ? We have had cases of blood transfusions of infected blood in developing countries. Who is responsible ?
How will the patient getting the contaminated blood be compensated ? While the US laws are very strict and quick, it will take decades in India.
What regulations are required for collection, distribution and sale of blood and blood plasma ? Who should do the regulation ?

There are number of essential life saving drugs which fall under the purview of ethics. How do we regulate them ? Millions of people are dying of AIDS because they cannot afford the drugs. Do we adopt the approach of Economists Adam Smith, Dr. Milton Friedman et al., that all businesses exist for making profits, satisfy the stakeholders, governments should not interfere in business and it is for the market forces and other stakeholders to decide what is good for them and the society ? Is the government not a stakeholder in any business ? Should the government be a passive spectator or take a more proactive role in the ethical conduct of a business ? One more problem that comes up when the governments become involved is that of lobbying, bribery and corruption, especially in developing countries. It is not that such things do not exist in rich and developed nations. Just look at the number of corporate giants who are under investigation in USA by both Justice department and SEC.

Finally, Pricing of life saving drugs is a tricky issue. Billions of dollars are spent by giant drug companies developing new molecules. Whether one is in a capitalistic or a socialistic system is not important. We have to absorb the good things of all systems and should not abandon them under ideology. While every company is entitled to make profits, the problem is how much in the case of life saving drugs ? There are some areas where policy decisions should be taken keeping the poor in mind. Nobody knows how long the drug companies take to amortize the research and development costs. This is an area that needs close attention by the concerned authorities.

Reference:

The best book I have come across on the subject of "Business Ethics" is by Ms. Rogene A Buchholz and Ms. Sandra B Rosenthal, both Professors at Loyola University of New Orleans and published by Prentice Hall, Englewood Cliffs, New Jersey, USA - 1998. The above case study has been taken from the book and our grateful acknowledgement to them.

Note:
This article was first published by us in July 2004.

Copyright. October 2007. www.madgopes.com . All rights reserved.



Business Ethics - Blood Money - Social Issues - To learn more about this author, visit Madhavan T Gopalachary's Website.

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