Prescription for Corporate Governance

This exercise from Norman Sheehan and Kay Keels addresses corporate governance and ethics (see the Jensen Pharma Teaching Note). Here is the setting: A pharmaceutical firm’s board must decide what to do with its best selling drug, Dekanor, in light of research that suggests that the drug may be causing serious harm. This reflects the ambiguity and choices Merck’s and Pfizer’s boards may have experienced in the years before they knew if their “blockbuster” drugs, Vioxx, Bextra and Celebrex, were harming patients. For example, the role play includes the impact of social media, pressure from rivals, and tactics sometimes used by pharmaceutical companies to discredit negative research studies. Board members are asked to choose between options including: 1) preemptively remove Dekanor from the market, 2) continue selling Dekanor but add additional product warnings and stop actively marketing the drug, or 3) continue to aggressively market the drug and fight to keep the FDA from banning it. The 14 roles include Jensen’s Chairperson and CEO, its five board members, and eight managers (click here for the Jensen Pharma Roles and Agenda). Each must balance his/her corporate agenda with his/her personal agenda. For example, some own considerable amounts of valuable stock that may affect their decisions.

Contributed by Norman Sheehan and Kay Keels

2 thoughts on “Prescription for Corporate Governance

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