Unethical Business and Success: A Case Study of Purdue Pharma

This report analyzes the success of Purdue Pharma, a US-based company involved in the opioid crisis, from the perspective of various stakeholders. It examines whether an unethical business can be considered successful.

Academic and
Professional Skills

EXECUTIVE SUMMARY
A business is called successful when it is able to achieve all its aims and objectives along
with earning profits and maintaining its prosperity for a long time. The company needs to
conduct its business practices following code of conduct and ethics which helps the company in
selecting between what is wrong and right which helps it in providing benefits to all its
stakeholders. This report is based on the case study of a US based company Purdue Pharma
which deals in manufacture and sales of OxyContin, a highly addictive painkiller that lead to the
opioid crisis in US. This report covers the success of this business from the perspective of
various stakeholders so that it can be determined if an unethical business which is earning huge
profits can actually be called as successful or not.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
ANALYSIS......................................................................................................................................4
Success in terms of Revenue..................................................................................................5
Success in terms of Shareholders...........................................................................................5
Success in terms of Board of Directors..................................................................................6
Success in terms of public confidence....................................................................................7
CONCLUSION................................................................................................................................8
RECOMMENDATIONS.................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
A successful business organisation is defined as a commercial entity who has been able to
achieve all its shot-term and long-term objectives and is able to meet the customer requirements
by providing them with the goods and services they need and want. Profits are earned by
successful businesses in an ethical manner so that the welfare of all its stakeholders can be
achieved. Success to a business is also associated with its profitability, productivity, its
competitiveness in the market, retention of old customers along with making new customers,
creating a brand image and market value so that repetitive business can be ensured. A successful
business effectively meets the demands of target market by introducing products and services
that can achieve maximum customer satisfaction (Gluck, Hall and Curfman, 2018).
Ethics are the moral principles and values that are applied by businesses in their
organisational culture so that the decisions taken by the organisation can benefit the society as a
whole. This helps the businesses to distinguish between what is wrong and right. This helps the
businesses in gaining public approval, support from the government, building brand image,
increase in customer loyalty, accomplishing its CSR targets etc. which makes the business
successful and also helps it in gaining a competitive advantage in the marketplace.
This report is based on a case study that is related to The Sackler Family Business which
owns a pharmaceutical company named Purdue Pharma. The company manufactures a highly
addictive painkiller drug called OxyContin and has lead to the death of around 49,000 people a
year due to its overdose in US (Makary, Overton and Wang, 2017). The company has been
criticised all over the US for its aggressive and misleading marketing and selling of this highly
addictive drug branding it as 'Hope in a bottle' which misleads both the public and medical
professionals. The purpose of this report is to analyse in detail if the company can be called as
successful if it conducts its business unethically. Also the report discuss the steps that can be
taken by the company to protect itself from getting sued. Further the success of company from
perspectives of various stakeholders will be discussed in detail.
ANALYSIS
The company Purdue Pharma which was founded in 1990s has been from the start
involved in unethical activities of manufacturing highly addictive painkiller OxyContin which
was responsible for the opioid crisis in US. The company achieved success as it heavily

prescribed this drug for chronic pain sufferers and marketed the drugs extensively through health
professionals and sales representatives. The budget that was allotted by the company to promote
these drugs was significantly higher than any other similar drugs which increased its popularity.
An analysis of the success of business from different perspectives is given as follows :
Success in terms of Revenue
Purdue Pharma has been able to earn huge profits on selling the highly profitable
OxyContin narcotics. The company has always been involved in aggressive marketing of this
drug through many channels including the health professionals so that the chronic pain sufferers
are prescribed OxyContin. This led to increase in the sales of company resulting in the increase
in its revenue. The medical representatives were influenced through paid conferences in resorts
which effectively increased the prescription of these drugs. The drug is highly addictive which
led to the increase in its sales as the company extensively marketed it as 'Hope in a bottle'.
All these factors contributed to the increase in company's revenue between 1995 and
2001 to about $2.8 billion and cumulative revenues had increased to $31 billion in 2016 and $35
billion in 2017 (Sacklers Received as Much as $13 Billion in Profits From Purdue Pharma.
2019). this has also led resulted in the increase in misleading marketing attempts of the company
to sell these drugs ignoring their addictive nature which causes negative impact on the public
health which could even lead to deaths (Purdue Pharma: Oxycontin maker faces lawsuits from
nearly every US state .2019). The company continued to market the drug's effectiveness while
downplaying the addictive nature of the drug which although increased the company's revenue
resulted in the death of 49,000 people. The company put 'profits over people' which lead to its
downfall in 2019 when 45 US states and 1,500 cities sued the company for its misconduct in
marketing and selling of this highly profitable drug which was fatal to the lives of people
because of its addictive nature. This lead the company Purdue Pharma to collapse and the
company filed for bankruptcy quite recently which shows that the company failed to succeed due
to its unethical behaviour which caused opioid crisis in US.
Success in terms of Shareholders
Shareholders are the owner of shares in the company who are also involved in company's
decision-making so that profits can be earned. Shareholders owns a percentage of company by
possessing its stocks and play direct and indirect role in company's operations. They help in
bringing finances for the company and also brings value to the company. Purdue Pharma is a

pharmaceutical company which is majorly held by the Sackler Family who are the descendent of
Mortimer and Raymond Sackler (Martin, 2015).
The Sackler family influenced the decisions of the company Purdue pharma which was
involved in the manufacturing of OxyContin, a highly addictive painkiller which lead to opioid
crisis in US and resulted in deaths of many people due to the overdose of this drug. The
shareholders of the company earned huge profits on the sale of these drugs. The company also
marketed the drugs aggressively influencing the physicians to prescribe OxyContin for chronic
pain bearers which led to the increase in sales of the drugs. The company was highly criticised
for marketing the drugs aggressively and in a manipulative manner which completely ignored the
addictive nature of the drugs. OxyContin constituted about 1.4% of the total opioid prescription
market of which 195 million prescriptions were written in 2017-18.
Although the company helped in increasing the profits for its shareholders, it can still not
be considered as successful because the company is now facing large amount of legal cases
against it on behalf of misconduct and unethical behaviour. The company has also filed for
bankruptcy which means that the shareholders will be liable to the extent of their holding in the
company so that the government claims can be appropriately settled and the company can be
declared as insolvent.
Success in terms of Board of Directors
Board of Directors of the company is a group of people who supervise and direct all the
activities and operations of the company so that its prosperity in the competitive marketplace can
be maintained. These people meet at regular intervals so that the policies and strategies of the
company can be formed in relation to the company's by-laws and governmental rules and
regulations so that the company can continue to exist in the legal-framework (Pearson, 2017).
The board of directors of Purdue Pharma were aware of the malpractices and misconduct
related to marketing the highly addictive drugs OxyContin were done so that huge profits can be
earned. The company did not care about the health of the people and continued to sell its
products in the market which now has brought the company to file for bankruptcy. The company
kept 'profits over people' and earned immense profits during the years 1999 to 2010. The
company sold its drugs under the tag line 'Hope in a bottle' which was misleading and the
addictive nature of the drugs were completely ignored. The drugs were aggressively marketed

and the health professionals were also influenced through conferences that were held in resorts
so that OxyContin became the most prescribed painkiller.
The board of directors did not follow the code of conduct in the business operations and
so the company has to now face lawsuits that are filed against it which leads the company to file
for bankruptcy. The company also unethically targeted the chronic pain bearing patients by
utilizing the state data so that extensive marketing of OxyContin can be done and the sales can
be increased. Thus it can be seen that the directors of the company willingly conducted unethical
actions in order to earn large profits which lead to the downfall of the company. Now the
company is being sued from the people who were the victims of these drugs and also the
government of US is taking actions against the company. Thus the company cannot be called
successful from the perspective of board of directors as the company is now soon about to close
down because of the unethical practices (Schaltegger and Burritt, 2018).
Success in terms of public confidence
The organisations are responsible for providing its customers with goods and services
that can help in dealing with their needs and wants. Also it is the company's responsibility to
provide its customers with safe and secure goods and services which does not cause any harm to
their health and well-being. But in the case of Purdue Pharma which is a company dealing in the
manufacture and sales of OxyContin which is a highly addictive painkiller drug. This drug lead
to the rise in number of deaths of people in US due its overdose as these drugs are addictive in
nature. Due to heavy marketing of these drugs done by the company and also influencing the
health professionals to prescribe these drugs to the patients who are in chronic pain. The
company tried to gain public confidence by wrongfully marketing the drugs as being a highly
curing alternative to all the other painkillers in market. Their marketing strategies were
manipulative which aimed at achieving high attention from the customers.
Thus it can be seen that from the perspective of public confidence also the company
cannot be said to be successful as it played with the emotions and health of the people which lead
to the rise in hospitalisation and increased number of deaths due to the overdose of OxyContin
which are addictive in nature (Soelberg and et. al., 2017).

CONCLUSION
From the above report it can be concluded that an organisation needs to conduct its
operations ethically in order to be successful and prosperous in the competitive environment.
Though initially the company can earn huge profits on behalf of its unethical activities but
sooner or later it faces the repercussions of its malpractices in the form of facing lawsuits,
loosing its market share, brand image getting deteriorated and the company finally becoming
insolvent. This is because the unethical practices of the business bring loss to its stakeholders in
terms of finance or health which eventually leads the victims to raise voice against the company.
The company Purdue Pharma sold OxyContin which are highly addictive painkillers and lead to
death of many people in US which ultimately resulted in facing lawsuits and the company filed
for bankruptcy.
RECOMMENDATIONS
Purdue Pharma can regain its image in the market in future by applying ethical practices
in its organisational culture effectively and efficiently for which following recommendations are
given : Reinforcements : It is the consequence that is applied by company so that their future
behaviour can be improved by encouraging and strengthening the ethical measures that
can be taken by the company. The company can apply certain policies like testing the
medicines and maintaining the harmful levels of the drugs so that they do not cause isses
related to public health. Training : It is related to training the employees of company so that their code of conduct
can be made ethical and they do not take decisions only on the perspective of earning
profits but also increasing the welfare of all its stakeholders. Training will also help in
enhancing the performance of the employees so that they can work efficiently which can
also help in increasing profits for the company. Monitoring : It is related to monitoring and controlling all the activities and operations of
the company so that ethical conduct in the actions can be ensured. This will help in
enhancing the ethical code of conduct in the company along with following of rules and
regulations of government and company.

REFERENCES
Books and Journals
Gluck, A.R., Hall, A. and Curfman, G., 2018. Civil litigation and the opioid epidemic: the role of
courts in a national health crisis. The Journal of Law, Medicine & Ethics. 46(2). pp.351-
366.
Makary, M.A., Overton, H.N. and Wang, P., 2017. Overprescribing is major contributor to
opioid crisis.
Martin, K.E., 2015. Ethical issues in the big data industry. MIS Quarterly Executive. 14. p.2.
Pearson, R., 2017. Business ethics as communication ethics: Public relations practice and the
idea of dialogue. In Public relations theory (pp. 111-131). Routledge.
Schaltegger, S. and Burritt, R., 2018. Business cases and corporate engagement with
sustainability: Differentiating ethical motivations. Journal of Business Ethics. 147(2).
pp.241-259.
Soelberg, C.D. and et. al., 2017. The US opioid crisis: current federal and state legal issues.
Anesthesia & Analgesia .125(5). pp.1675-1681.
Thompson, A., Strickland, A.J. and Gamble, J., 2015. Crafting and executing strategy: Concepts
and readings. McGraw-Hill Education.
Wang, L.C. and Calvano, L., 2015. Is business ethics education effective? An analysis of gender,
personal ethical perspectives, and moral judgment. Journal of Business Ethics .126(4).
pp.591-602.
Wood, D.J. and Logsdon, J.M., 2017. Theorising business citizenship. In Perspectives on
corporate citizenship (pp. 83-103). Routledge.
Online
Purdue Pharma: Oxycontin maker faces lawsuits from nearly every US state .2019. [Online]
Available Through: <https://www.theguardian.com/us-news/2019/jun/03/purdue-
opioids-lawsuit-oxycontin-california-maine-hawaii>
Sacklers Received as Much as $13 Billion in Profits From Purdue Pharma. 2019. [Online]
Available Through: <https://www.wsj.com/articles/sacklers-received-12-billion-to-13-
billion-in-profits-from-oxycontin-maker-purdue-pharma-11570221797>