CadMex International Business
CadMex International Business
With the completion of the University of Phoenix simulation “Addressing International Legal and Ethical Issues,” several concerns were identify and they need to be addressed before entering any legal binding business contract with an international organization. This paper will discuss the decisions that were made, and it will explain how Gentura will be in breach with the contract with CadMex.
Conducting business outside of the United States some legal issues may arise, especially when making contracts internationally. When a U.S. company comes into an agreement with a company that is in another county, the U.S. must ensure that the contract that is being form is legal and acceptable. Gentura is a biotechnology company located in a small developing county on a high growth curve name Candore. Gentura evolved from an enzyme manufacturer to a full-fledge biotechnology company that focused on biopharmaceutical products, and recently Gentura developed a drug called ProPez, an anti-diabetes agent. However Gentura did not have the resource to market and manufacture ProPez, so the company wanted to establish a partnership with CadMex.
CadMeX decided to manufacture ProPez, but in return CadMex wanted to have exclusive marketing rights for ProPez. Everything was going well until the Gentura was faced with several issues. One of those issues it was that the president of the Candore was overthrown by a nationalist organization. This organization promised to establish democracy in Candore, which created new political changes. The political changes that were made affected the way that Candore conducted business. Apart from the political changes the Candorean authorities declared a national health alert, which over 3 percent of the Candorean population suffered from an unidentified viral infection. One of the many drugs that were used for treat this treatment was called ViroPlax. Gentura was under a lot pressure from the government to produce VIroBlax at a subsidized price, this caused a breach to the contract because ViroBlax violated the payment terms of the contract between Gentura and CadMex. In this case CadMex would lose financially if the price of the drug was motify.
CadMex had the option to take a legal action, but to avoid any legal fees and time spent in court CadMex decided to take no legal action against Gentura. After negotiating CadMex decided to get shared marketing rights of ViroBlax, this decision made good business sense. It allowed for CadMex to recoup the losses on ViroPlax and it gave the chance for CadMex to explore other markets for another new drug. This decision was probably far more profitable than taking legal action, or taking a one-lump sum payment as compensation. CadMex took the consideration of the human aspect of the situation from the overthrow of the president of Candore, and the need of this drug due to the epidemic that evolved.
After all that, the Candorean government decided to suspend CadMex’s patent on ViroBlax, because Gentura was not able to meet the expected demand of ViroPlex in the required time. Faced with this dilemma, CadMex decided to sublicense with local pharmaceutical companies, and opposed to take any legal action against the Candorean government. Sublicensing with other pharmaceutical pharmacies meant that CadMex would get the royalty payment that was due to them as patent holders. CadMex also had the option of offering ViroBlax to the Candorean Government at a subsidized price, by doing that CadMex would of still have their patent rights but they would have barley any operating profits.
No matter how carefully a contract is constructed it is impossible to pre-define how to proceed in every situation, so if Cadmax decided to take legal action against the Candorean Government they would of risked alienating the citizens of Candore and potentially the world. CadMex learned a very valuable lesson about doing business in foreign companies, especially that they need to ensure that the contract that, which forms the basis of the agreement is legally enforceable. U.S companies also need to consider the culture and the ethnic difference of each country that they are making business. Avoiding a legal law suit is may be the best choice to come to agreement outside a court room.