Ethical Behavior of Medical Representatives — A Case Study of Pharmaceutical Industry in India

by Molugulu Nagashekhara

Abstract

The recent unethical behavior of individuals like Mr. Bernard Madoff, former NASDAQ chairperson, Mr. Ramalingaraju, Chairman of Satyam Computer Services, and certain major pharmaceutical industries are inundating the media these days. The pharmaceutical industry contributes 1.6 percent of GDP and it is the fastest growing sector in the Indian economy with a turnover of Rs. 525.6billion. India ranks 3rd in volume and 14th in value terms in the globe. Medical representatives are the direct vehicle in the promotion of pharmaceutical products and hence bear the blunt of the significant pressure from the peers, managers and the company management to accomplish market targets.

In this present study, an attempt is made to study the factors, which influence the ethical behavior among medical representatives in pharmaceutical industry. This study utilizes variables on organizational factors and individual factors as the measurement tools. This study is categorized as hypothesis testing as research design.

It is a cross-sectional and correlational study, with individuals as the unit of analysis under non-contrived settings. The survey is carried out using a sample size of 300 medical representatives via simple random and cluster sampling. The chi-square tests prove the strong association between dependent and independent variables. The model chosen for testing the ethical behavior through organizational and individual factors gives an R2 value of 61.3% with an adjusted R2 of 60.3%. The F value (65.952) is also significant (p=0.000) which implies that the variables have better fit in the multivariate model.

The study recommends that, the Machiavellianism is an essential factor to consider in the recruitment of medical representatives. Systematic training by pharmaceutical companies is needed to enhance the awareness on marketing norm perceptions. Pharmaceutical companies are advised to stop the performance related pay schemes to their medical representatives.

We further recommend consideration of organizational related factors and external factors such as competition, doctors’ influence, place of promotion (urban or rural) etc. are necessary to study the comprehensive ethical behavior of medical representatives. 

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