Business ethics is an extremely important topic in our world today. This is especially true because of the fact that we live in a changing society where it has become increasingly common to see more and more cases of companies that participate in illegal, immoral and unethical activities. So that we can prevent these behaviors, it is necessary to study and understand how these situations can occur and what we can do to prevent them from happening.
In this research paper, we will examine in detail the case of KV Pharmaceuticals, also known as KV. We will discuss a few major areas of topic that include how and why these events took place, as well as what could have been done to prevent them. Next, we will take a look at our stakeholder map and describe how each was affected. Then, we will include some suggestions for prevention and present an industry leader with model behavior.
Reasons for KV Pharmaceutical’s downfall
There were several reasons why KV Pharmaceuticals deviated from their corporate values. Many of them had to do with the conduct and misguidance of its officers and directors, particularly former CEO Marc Hermelin. He and many others led the company into a downward spiral of transgressions which resulted in recalls, halted production, counterfeit stock information, noncompliance with FDA regulations, issues with budgeting controls, and layoffs for KV Pharmaceutical’s subsidiaries. All of these problems led to a vast amount of lawsuits and as a result, have cost the company millions of dollars.
Noncompliance with FDA regulations
The problems at KV Pharmaceuticals began in May 2008 when a distributor in Canada and a pharmacy in California complained to the company and the ETHEX subsidiary about oversized morphine sulfate pills, a pain-relief medication (KV Pharmaceutical, 2010). One month later, KV decided to recall some of the morphine sulfate it had distributed, and it also filed a field alert report to the FDA informing them about their recall. KV immediately began an internal investigation of their manufacturing process and their products; the investigation revealed that not only were the morphine sulfate pills oversized, but the propafenone and dextroamphetamine sulfate tablets as well. These oversized tablets can result in the patients receiving almost twice the amount of the recommended dose, which can lead to fatal consequences. Propafenone is an anti-arrhythmic medication that treats illnesses associated with heart palpitations. An overdose can cause low blood pressure or heart palpitations which may lead to death. Dextroamphetamine sulfate is used to treat narcolepsy, ADHD in children, epilepsy and parkinsonism; an overdose can lead to fatal poisoning (KV Pharmaceutical, 2010).
The complaints led to the inspection of KV by the FDA from December 2008 to February 2009; the inspection results confirmed that KV Pharmaceuticals had a considerable amount of cGMP violations, and...