Legislation being considered in Congress would have the Food and Drug Administration approve new pharmaceutical products only if a new product can be shown to be more effective than all other existing products for treating a medical condition. In contrast, the less stringent existing standard is that a product can be approved if it is more effective than a placebo. (Under either standard, the product must also be safe.)
You are the public affairs V.P. for a pharmaceutical company that has several successful products on the market. Those products have patents that will not expire for many years, so no other company can produce your products, but other companies could develop different products that treat the same medical conditions that your company's products treat.
Your company has no new products in its development pipeline. In the interest of the company's shareowners, should you recommend to your CEO that your company should support or oppose the proposed legislation? Explain.
(This question is about what action would be profitable for your company, not about what arguments your lobbyists would make; you have confidence that your staff could generate arguments about the benefits to the nation to support whichever position you recommend.)
Now you have been hired as the public affairs officer by an upstart pharmaceutical company that has products under development but has no products on the market yet.
In the interests of the company's shareowners, what is your recommendation to your CEO about that same proposed legislation? Explain. (The same parenthetical applies as in part (a).)