Part I: For this discussion, every student will be emailed a role to play on the board of directors. Read the attached case, "The Panalba Decision." As a member of the board, you must help to reach a decision at today's meeting (in this discussion). The Chairperson of the Board, Dr. UpJohn, has provided the case background information to each board member. Your task is to select one of the five alternatives from the "Panalba Decision" for:(1) The U.S. market; and(2) assuming the FDA does ultimately ban Panala in the U.S., the foreign market (which will not be affected by the ban).You will be assigned a role on UpJohn's Board. Read your role and act as if you were actually in that role. The roles all differ, so do not directly discuss vour role with other board members until you post your discussion when you can then identify who you are. Based on your role, write a 400-500 word argument for the alternative you will choose for (1) the U.S. market, and (2) the foreign market (you can choose the same or different alternatives for (1) and (2)). Background - 2The following possible solutions are being considered by the Board:1. Recall Panalba immediately and destroy all inventories.2. Strop production of Panalba immediately, but allow the sale of existing inventories.Stop all advertising and promotion of the drug to physicians, but still provide it to thosedoctors who request it.3.Continue efforts to most effectively market Panalba until sale is actually banned.Continue efforts to most effectively market Panalba and take legal, political and othernecessary steps to prevent the FDA from banning Panalba.4.5.TOHOAs part of the information provided to each Board member, the following table summarizes theestimated costs (in millions of dollars) for each of the above alternatives.ALTERNATIVE1-Recall2-Stop Production3-Stop Promotion4-Continue until Ban5-Prevent BanSHAREHOLDERS CUSTOMERS1208075702007090110160EMPLOYEES10865.5TOTALCOSTS130158171185180.5NOTE: These estimates represent estimated losses (in millions of dollars) to each stakeholderaffected by the related decision. The losses to customers represent death and illness caused byPanalba for which no compensation is received; losses to employees represent lost wages due tolayoffs and expenses not covered by severance pay.Instructions for In-Class Role PlayAs a member of the Board, you must help to reach a decision at today's meeting. TheChairperson of the Board, Dr. Upjohn, has provided this background information to each Boardmember. Your task as a group is to select one of these five alternatives for:1. the U.S. market; and2. assuming the FDA does ultimately ban Panalba in the U.S., the foreign market (whichwill not be affected by the ban).You will be assigned a role on Upjohn's Board. Read your role and act as if you were actually inthat role. While you may improvise as necessary, do not step out of your role. The roles alldiffer, so do not directly discuss your role with other Board members.Dr. Upjohn will convene the meeting as soon as everyone has read the background information. THE PANALBA DECISIONBackgroundYou are a member of the Board of Directors of the Upjohn Corporation. The company hascalled a Special Meeting of the Board to provide some guidance as to what should be done withone of the company's products, a drug named "Panalba."Panalba is a fixed-ratio (containing a combination of drugs) antibiotic drug sold by prescription.It has been on the market for over 12 years and has been highly successful for the company. Itnow accounts for over 250 million dollars per year, which is 14 percent of Upjohn's gross profitin the United States. Profits from foreign markets, where Panalba is marketed under a differentname, are roughly comparable to those in the U.S.Over the past 25 years, there have been numerous medical researchers (e.g., the AMA's Councilon Drugs) that have objected to the sale of the vast majority of fixed-ratio drugs. The basicargument against these drugs is: (1) there is no evidence that fixed-ratio drugs provide improvedbenefits over single drugs, and (2) the possibility of detrimental side effects, including death, isat least doubled. These researchers, for example, have estimated that Panalba is contributing toapproximately 22 to as many as 50 unnecessary deaths per year, deaths that could have beenprevented if the patients had used a substitute, single drug made by one of Upjohn's competitors.Due to the difficulties of proving a definitive cause-effect relationship, however, Panalba (aswell as other fixed-ratio drugs) have remained on the market and many doctors continue to usethem. These drugs offer a type of "shotgun" approach for the doctor who is unsure of his or herdiagnosis.Recently, based on their review of the situation, a National Academy of Science-NationalResearch Council Panel, a group of highly-respected, impartial scientists, recommendedunanimously that the Food and Drug Administration (FDA) ban the sale of Panalba. One of themembers of the panel was quoted in the press noting, "There are few instances in medicine whenso many experts have agreed unanimously and without reservation (about banning Panalba)."These experts were clear that while any drug has the possibility of dangerous side effects, thecosts associated with the fixed-ratio Panalba drug clearly outweighed the possible benefits.This Special Board Meeting was called due to an emergency situation. The FDA had justinformed Upjohn of its intent to ban Panalba in the U.S. and wanted to give the company achance for final appeal. Should the ban become effective, Upjohn would have to stop all sales ofPanalba and attempt to remove inventories from the market. Upjohn has no close substitute forPanalba, so doctors would switch their patients to substitute drugs readily available from othercompanies. The selling price of these substitute drugs is roughly the same as the price forPanalba.The Board's assumption is that it is unlikely that bad publicity from this case would have anysignificant effect on the sale of Upjohn's other products or its long-term profitability.

Question

Part I: For this discussion, every student will be emailed a role to play on the board of directors. Read the attached case, &#34;The Panalba Decision.&#34; As a member of the board, you must help to reach a decision at today's meeting (in this discussion). The Chairperson of the Board, Dr. UpJohn, has provided the case background information to each board member. Your task is to select one of the five alternatives from the &#34;Panalba Decision&#34; for:(1) The U.S. market; and(2) assuming the FDA does ultimately ban Panala in the U.S., the foreign market (which will not be affected by the ban).You will be assigned a role on UpJohn's Board. Read your role and act as if you were actually in that role. The roles all differ, so do not directly discuss vour role with other board members until you post your discussion when you can then identify who you are. Based on your role, write a 400-500 word argument for the alternative you will choose for (1) the U.S. market, and (2) the foreign market (you can choose the same or different alternatives for (1) and (2)). Background - 2The following possible solutions are being considered by the Board:1. Recall Panalba immediately and destroy all inventories.2. Strop production of Panalba immediately, but allow the sale of existing inventories.Stop all advertising and promotion of the drug to physicians, but still provide it to thosedoctors who request it.3.Continue efforts to most effectively market Panalba until sale is actually banned.Continue efforts to most effectively market Panalba and take legal, political and othernecessary steps to prevent the FDA from banning Panalba.4.5.TOHOAs part of the information provided to each Board member, the following table summarizes theestimated costs (in millions of dollars) for each of the above alternatives.ALTERNATIVE1-Recall2-Stop Production3-Stop Promotion4-Continue until Ban5-Prevent BanSHAREHOLDERS CUSTOMERS1208075702007090110160EMPLOYEES10865.5TOTALCOSTS130158171185180.5NOTE: These estimates represent estimated losses (in millions of dollars) to each stakeholderaffected by the related decision. The losses to customers represent death and illness caused byPanalba for which no compensation is received; losses to employees represent lost wages due tolayoffs and expenses not covered by severance pay.Instructions for In-Class Role PlayAs a member of the Board, you must help to reach a decision at today's meeting. TheChairperson of the Board, Dr. Upjohn, has provided this background information to each Boardmember. Your task as a group is to select one of these five alternatives for:1. the U.S. market; and2. assuming the FDA does ultimately ban Panalba in the U.S., the foreign market (whichwill not be affected by the ban).You will be assigned a role on Upjohn's Board. Read your role and act as if you were actually inthat role. While you may improvise as necessary, do not step out of your role. The roles alldiffer, so do not directly discuss your role with other Board members.Dr. Upjohn will convene the meeting as soon as everyone has read the background information. THE PANALBA DECISIONBackgroundYou are a member of the Board of Directors of the Upjohn Corporation. The company hascalled a Special Meeting of the Board to provide some guidance as to what should be done withone of the company's products, a drug named &#34;Panalba.&#34;Panalba is a fixed-ratio (containing a combination of drugs) antibiotic drug sold by prescription.It has been on the market for over 12 years and has been highly successful for the company. Itnow accounts for over 250 million dollars per year, which is 14 percent of Upjohn's gross profitin the United States. Profits from foreign markets, where Panalba is marketed under a differentname, are roughly comparable to those in the U.S.Over the past 25 years, there have been numerous medical researchers (e.g., the AMA's Councilon Drugs) that have objected to the sale of the vast majority of fixed-ratio drugs. The basicargument against these drugs is: (1) there is no evidence that fixed-ratio drugs provide improvedbenefits over single drugs, and (2) the possibility of detrimental side effects, including death, isat least doubled. These researchers, for example, have estimated that Panalba is contributing toapproximately 22 to as many as 50 unnecessary deaths per year, deaths that could have beenprevented if the patients had used a substitute, single drug made by one of Upjohn's competitors.Due to the difficulties of proving a definitive cause-effect relationship, however, Panalba (aswell as other fixed-ratio drugs) have remained on the market and many doctors continue to usethem. These drugs offer a type of &#34;shotgun&#34; approach for the doctor who is unsure of his or herdiagnosis.Recently, based on their review of the situation, a National Academy of Science-NationalResearch Council Panel, a group of highly-respected, impartial scientists, recommendedunanimously that the Food and Drug Administration (FDA) ban the sale of Panalba. One of themembers of the panel was quoted in the press noting, &#34;There are few instances in medicine whenso many experts have agreed unanimously and without reservation (about banning Panalba).&#34;These experts were clear that while any drug has the possibility of dangerous side effects, thecosts associated with the fixed-ratio Panalba drug clearly outweighed the possible benefits.This Special Board Meeting was called due to an emergency situation. The FDA had justinformed Upjohn of its intent to ban Panalba in the U.S. and wanted to give the company achance for final appeal. Should the ban become effective, Upjohn would have to stop all sales ofPanalba and attempt to remove inventories from the market. Upjohn has no close substitute forPanalba, so doctors would switch their patients to substitute drugs readily available from othercompanies. The selling price of these substitute drugs is roughly the same as the price forPanalba.The Board's assumption is that it is unlikely that bad publicity from this case would have anysignificant effect on the sale of Upjohn's other products or its long-term profitability.

Accepted Answer

As a member of the Board of Directors of the Upjohn Corporation, tasked with making a critical…