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RICHARD FILBERT WIRYOKUSUMA

UCOR 2910-02
WINTER 2014
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A. INTRODUCTION
As we know, every industry in the world wants to have a large amount
of money that comes from their revenue to create a large amount of profit. In
order to reach this capability, every industry needs to develop their human
resource, system and technology to reduce the cost of producing their
products and making a huge profit since their selling product increase, but
their cost decrease.
Based on the GlaxoSmithKline, Bristol-Myers Squibb, and AIDS in
Africa cases, we can see that there are several company work in producing
the medicine to help AIDS patient in order to give them opportunity back to
their normal life. GlaxoSmithKline is a British pharmaceutical company
founded in 1873 and hold the patent to five antiretroviral that they created.
This company was one of the worlds largest and profitable companies that
sold medicine in the world. The second company that becomes Glaxos rival is
Bristol-Myers Squibb. This company is an American pharmaceutical company
founded in 1858 and holds two antiretroviral patents.
This article talks about number of patient who suffers AIDS disease.
Based on the research in 2004, there are 5 million more people had
contracted, 3 million had died and 40 million people were living with the
infection. However, seventy percent of these people are from sub-Saharan
Africa. The average level of infection among adults in sub-Saharan region
was 8.8 percent, Botswana was forty percent, Zimbabwe was 34 percent,
Lesotho was 31 percent and Swaziland was 33 percent. These huge numbers

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of percentage have created a very bad impact to the nation especially in their
labor productivity and nations economy.
Based on the research, the average per-person annual income in subSaharan Africa was $500 while the major drug companies charged $10,000 to
$15,000 to people who suffered the AIDS disease and consumed this kind of
medicine. This huge difference becomes the major problem that sub-Saharan
Africa has received since there was no money to buy the medicine while the
patient needed to consume this kind of medicine in ordered to give them
opportunity to live longer. Therefore, sub-Saharan African becomes the ones
most desperately for solving this problem and gets the solution since there are
4 million annual new cases appeared in this region every year.
There are many argument popped up after seeing the bad impact that
happened in sub-Saharan Africa because insufficient fund to buy the
medicine. There were several reasons why Glaxo, Bristol and other big
companies did not want to reduce the price. First, it was better to limited
resources to develop the program to prevent AIDS rather than spend their
money to buy this medicine. Second, the combination drug of cocktails had
to be controlled by the hospital, clinics, doctor and nurse. The other reason
was because the cost of developing this drug was very expensive since they
had to research, development, and testing the drug to make sure the safety
and efficacy of the medicine to be consumed. Since there was a huge cost
that the company had to spend, the price of the medicine became very high.
The last, the company was afraid that the low price that they offered to the

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developing country can cause smuggled back to the US and other developed
countries.
The other argument talked about their financial analysis in each
company. Even though they sold the medicine with the low price, the
company still had a profit and still had money to do the research on
developing their drugs. Based on the financial research on 2003, GlaxoSmithKline Company had a profit margin around 21 percent, returned on equity
around 122 percent and returned on assets around 26 percent. Bristol-Myers
Squibb had a profit margin around 19 percent, returned on equity is 36
percent and returned on assets around 14 percent. These reports showed
that the big drug companies still had the capacity in lowering the cost of the
medicine to the developing countries and still had a profit even though the
drugs being smuggled into US.
In addition, World Trade Organization decision (WTO) adopted an
agreement called TRIPS (shorthand for Trade-Related aspects of Intellectual
Property rights). In 2001, Indian Drug Company succeeds to copy three of the
patent drugs and combined it together with a low price. The price was very
low and affordabled for the developing countries to buy this kind of medicine.
However, there were many pro and cons appeared after this surprising
movement since the big drug company thought that Indian Drug Company
was stealing their property with very unfair condition. There was a price war
between the Indian companies and other big drug companies at that time and
created many losses to big drug companies and advantageous to the
developing countries.

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In conclusion, World Health Organization announced to collect more
fund from the government to bring at least 3 million antiretroviral to people
who needed rather in develop countries or developing countries by the end of
2005.

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B. UTILITARIANISM
In general, we know that utilitarianism is one of the ethical principles in
business. Utilitarianism is useful in identify the cost and benefit an individual
or organization in making the decision. Based on Velasquez book,
Utilitarianism is a general term for the for the view that actions and policies
should be evaluated on the basis of the benefits and costs they produce for
everyone in society. (Pg.78) This theory is focusing on determine the benefit
of the actions that individual or organization to produce the greatest benefit
over the cost in society or business environment. Therefore, the main point of
Utilitarianism is to maximize benefit and minimize the cost on society.
There are several steps that we need to go through before analyzing
the cases using this kind of concept. First we need to identify all of the
alternatives that we can see based on the case that we have. After that, we
can find cost and benefit for all of the affected parties and how each of the
parties produces of affect the society. The last is choosing the best net result
of the cost and benefit that we can find in the case. Moreover, we also can
identify the needs, wants and categorized each of the parties alternatives into
two major points such as instrumental goods or intrinsic goods. Based on
Velasquez book, Instrumental goods are things that are considered valuable
only because they lead to other good things while Intrinsic goods are things
that are desirable independent of any other benefits they may produce. (Pg.
85) All of these steps are helpful to determine and analyze the actions that the
company chooses rather it is right or wrong decision in their business
progress based on the case that we are going to evaluate.

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Based on GlaxoSmithKline, Bristol-Myers Squibb and AIDS in Africa,
we can identify some cost and benefit from each parties and going through all
of the steps to analyze this case using Utilitarianism concept. AS we can see,
the existence of the Indian Drug Company creates a huge good impact to
solve sub-Saharan Africa problem at that time. Moreover, since sub-Saharan
Africa was the most desperate region because of the insufficient fund to buy
the drug, the existence of the Indian Drug Company offer the same medicine
with a low price was very helpful for African people in ordered to give them
opportunity to consume this kind of medicine in their life. Many of African
peoples life were saved at that time and it was one of the great step to move
forward for Indian Drug Company since they had an ability to produce the
same medicine with a lower price and competed the big drug companies at
that time.
The other benefit after Indian Drug Company offered the affordable
drug cocktail was, many people who suffered the HIV/AIDS virus could have a
long live and ability to work and expanded their education to get a better
future. It was also increase the productivity of African labor and economy of
this nation since their people had an opportunity to expand their education to
do the research in ordered preventing the AIDS virus spread out among them
and got a longer work hour in establishing their business, industry and many
others. The patient also had an opportunity in spending their time with their
family and enjoyed their time together with his family member as other person
felt it. This kind of situation was covered in Utilitarianism in noneconomic
goods categories which covered such as the enjoyment love, freedom,
health, and fatherhood-that we would not be willing to trade for any amount of

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the enjoyment of economic goods because noneconomic goods cannot be
measured in economic measured. (Pg.84) Based on this explanation, we
could see the enjoyment that family offered was very important and cannot be
measured in economic. Since you spent a lot of money on getting the drugs,
you would have an opportunity to enjoy your time being with family and
worked harder to receive a good income to defray all of the family expense
and your expense in buying the cocktail drugs.
However in GlaxoSmithKline, Bristol-Myers Squibb and other big drug
companies side, we can see that what Indian Drug Company did was not
acceptable since it stole and copied the drugs that all of this big companies
had already spent a huge amount of money to produce and did the research
to develop this medicine. However, the company also still held the patent of
this kind of drugs. Moreover, as we could find in Velasquezs book, the term
of utilitarianism is used for any theory that advocates selection of that action
or policy to maximizes utility. (Pg.78) Related to this case, since Indian Drug
Company entered the market and offered an affordable price for the same
drug, it would not maximize the company profit and maybe it could harm the
company. The major companys profit would decrease and it would affect on
the performance of the company in doing the research on developing their
drug formula to be better.
Therefore, this theory seems work to identify all of the alternatives in
getting the answer in which the GlaxoSmithKline Company and others or
Indian Company are morally doing the right action based on the ethical
principle in utilitarianism section.

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C. RIGHTS
Nowadays, every people around the world have their own right to
choose every action, decision, future career and many others in their lives.
There are three types of rights such as legal right, moral right and human
right. However, moral and human right have the same meaning that all
human beings everywhere possess to an equal extent simply by virtue of
being human beings while Legal right is an entitlement that derives from a
legal system that permits or empowers a person to act in a specific way or
that requires others to act in certain ways toward that person. (Pg. 93) Legal
right is useful in making an agreement with individual or organization. This
agreement called contractual rights and duties which both of the parties need
to follow all of the agreement that they have already agreed. As Velasquez
states, Contractual rights and duties require (1) the parties know what they
are agreeing to (Pg.97) Moral right is the freedom that every person has to
interpret their interest, opinion, act and many others without any compulsion
from other people as an individual freedom. Moreover, this right is more
clearly in the Kants theory, which talks about the right of every individual or
organization in control his or her freedom.
Based on a German Philosopher named Immanuel Kant, all of his
right theory is based on his moral principle that he called categorical
imperative which means that every person has to be treated as a free person
equal to everyone else. There are two formulations that are applied to his
categorical imperative theory.

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Kants first formulation is I ought never to act except in such a way
that I can also will that my maxim should become a universal law (Pg.99)
Based on this explanation, I found that we can act as what we want to be and
what we have planned to be. However, this act can be universal if the person
who has a similar situation decided to do the same thing as what you act to be
for the same reason. In Kants first formulation, there are two categories in
determining rather the act is moral right or wrong such as, Universalizability
and Reversibility. Reversibility means that a persons reasons for acting,
then, must be reversible; one must be willing to have all others use those
reasons even against himself. (Pg.99) From this explanation, I found that
before we decided to act and did whatever we have already planned, we had
to think reversely did this act is unethical or not or maybe could harm others
maybe in their feeling, mental or many others. Universalizability means A
persons reasons for acting, then, must also be universalizable: It must be
possible, at least in principle, for everyone to act on those reasons. (Pg. 99)
The second formulation is Act in such a way that you always treat
humanity, whether in your own person or in the person of any other, never
simply as a means, but always at the same time as an end. (Pg.100) Based
on this statement, I could find that as human being we have to respect others
and treat them in a proper way without harm their freedom, feeling, dignity
and many others. The major point that Kant tried to explain in this second
formulation:
An action is morally right for a person if, and only if, in performing the
action, the person does not use others only as means for advancing his

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or her own interests, but always (1) treats them as they have freely and
rationally consented to be treated, and (2) contributes to their ability to
pursue what they have freely and rationally chosen to pursue.
(Pg.100)
This means that Kants second formulation is focusing on human being dignity
as the person who has freedom on choosing his or her own line.
According to the case story above, we can find that Indian Drug
Company sold and copied the same drug that Glaxo and Bristol companies
has produced with high cost. The reason Indian Drug Company did it because
the price of the medicine that big drug companies offered were very high.
Therefore, Indian Drug Company was trying to produce the same medicine
with an affordable price, so the developing countries especially sub-Saharan
Africa could buy this medicine and fix the number of people who suffered
HIV/AIDS virus.
Based on Kants formulation, people needs to treat others equally and
as free and rational person. This company tried to offer medicine with an
affordable price in ordered to save peoples life and gave them a chance to
live differently and developed their talent to produce much money and helped
the countries in fixing their nationals economic growth. On the other hand,
Indian company violated the Glaxo and other big drug companies that had the
patent on producing this kind of medicine. Glaxo and other companys profit
would decrease significantly and they were not able to do the research in
developing the medicine since they were not having sufficient money to defray
the research process. Indian company was not thinking reversely about their

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plan and never thought about the fate of other big companies if they were
selling the same medicine with a lower price. Thus, there were many pro and
cons that support Indian drug company to do what they have planned to do in
producing the same medicine with an affordable price since their action was
harm the big drug companies as the first industry that found this kind of
medicine formula that could help AIDS patient in the world.
According to right theory, it is hard to distinguish which companies are
morally correct in responding this AIDS disease problem. However, since right
is more focusing on human life, Indian Company was doing the right thing
since they produced the cocktail medicine with a low price to give a long life to
the AIDS patient who lived in poor nation with a low average income per year.

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D. JUSTICE
This theory appeared because there were many unfairness situations
where many people received and still harm themself as neither individual nor
organization. Justice or injustice decision was very hard to be analyzed since
there were no real justices that exist in this world. Even though, there were
many people thought that it was already fair enough to solve the conflict
between two parties, but actually on the other side, it was still hurt the other
parties that involved in this situation or conflict. However, in this theory, I will
more focus on the distributive theory, which talks about the first and basic
category, is concerned with the fair distribution of societys benefits and
burdens.(Pg.107)
Distributive justice fundamental principal talks about the justice to give
the right and ration to every people based on what he has deserved to have.
Based on Velasquezs book fundamental principle of distributive justice is,
Individuals who are similar in all respects relevant to the kind of
treatment in question should be given similar benefits and burdens,
even if they are dissimilar in other irrelevant respects; and individuals
who are dissimilar in a relevant respect ought to be treated dissimilarly,
in proportion to their dissimilarity. (Pg. 107-108)
In addition, based on Rawls theory distributive justice can be classified in
three different principles such as principle of equal liberty, difference principle,
and principle of fair equality of opportunity. Principal of equal liberty is the
claim that each citizens liberties must be protected from invasion by others

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and must be equal to those of others. This principle protects the right of
people to free in giving their opinion, comment, voting, freedom to hold
personal property and the last is the freedom from arbitrary arrest. Difference
principle is the claim that a productive society will incorporate inequalities,
but takes steps to improve the position of the neediest members of society.
This means that this principle allows us to maximize benefit for the least
advantage and it is used in business institution to creating an efficient strategy
in order to manage their resources to survive in the competitive market. The
last principle of fair equality of opportunity is the claim that everyone should
be given an equal opportunity to qualify for the more privileged positions in
societys institutions. (Pg.115) This principle is created to prevent the racial
and sexual discrimination from Job qualification for the desirable jobs. There
are two imaginary situations that Rawls created such as original position and
veil of ignorance. Original position was An imaginary meeting of rational selfinterested persons who has to choose the principles of justice by which their
society will be governed while veil of ignorance was The requirement that
persons in the original positions must not know particulars about themselves
which might bias their choices.. (Pg.116)
Based on the case above, we can know that Indian company violated
the principle of equal liberty that Rawls explained above. Indian company
violated the freedom of Glaxo and Bristol Company as the major company
who held the patents of this medicine as their personal property. This was
where justice right should be implanted to this case since the big drug
industries received unfair situation from Indian company. The reason this
situation was unfair because the major company such as Glaxo and Bristol

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would loss a huge profit from selling their own product and therefore it would
effect to their workers that had the responsible to produce the medicine and
doing the research to develop this kind of drug to be better than before. Glaxo
and Bristol had also losses their time, money, and took a huge risk in doing
the research about this cocktail medicine that became the medicine that AIDS
patient needed in order to give them a long live.
However, it is also unfair for the sub-Saharan Africa nation side as the
poor country that does not have money to buy the cocktail medicine that
Glaxo and other big companies offered. Based on the research, the average
annual income in sub-Saharan Africa per person is just $500 and they have to
buy the medicine that cost $10,000 to $15,000 a year, which is impossible to
do. Glaxo, Bristol and other companies are not fair enough in costing their
product to the developing countries since the average income per person in
developing countries are smaller that the average income per person in
develop countries that exceed $40,000 per year for each person.
Each party on this case has an advantage and disadvantage from
selling and buying this cocktails medicine. There are many argument that
each party could argue since there are no real justice that can exist in this
world. However, based on the case that I analyzed above, GlaxoSmithKline
was getting an unfair situation where Indian companies copied and produced
the medicine illegally without any permission from the big drug companies as
the company who held the patent of the medicine.

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E. CARE
Care theory is one of the hardest ethical principles to be analyzed
since we need to have careness feeling in order to build a good relationship
with one another. This theory is focusing on the argument that each person
requires to show his or her caring relationship with others and has to be
valuable and nurtured. Having a good relationship with others will also give
many benefit for individual or organization since there are a lot chance to form
a partnership that have the same vision and motto in developing their
business.
Based on Velasquezs book, ethic of care is An ethic that requires
caring for the concrete well being of those particular persons with whom we
have valuable close relationships, particularly those dependent on us. (Pg.
121) we can find that this theory talks about how we build a valuable
relationship with others as an individual. Moreover, there are two moral
demands that emphasizes the ethic of care such as,
1. We each exist in a web of relationships and should preserve and
nurture those concrete and valuable relationships we have with specific
persons.
2. We each should exercise special care for those to whom we are
concretely related. (Pg. 121)
This quotation summarized all of the important points in care theory. Based on
this summarization, we could investigate the Glaxo and Bristol case into some
points.

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Based on this introduction above, we can see that GlaxoSmithKline
and other big companies were not shown their care to the people in subSaharan Africa. They are just thinking about their companies profit, which can
be decrease if the companies sell the product in a low price. This kind of
respect does not morally correct since we could see that since the company
egoism to maintain their price, there are many people die and losing their
future because of the disease that they suffered and there are no other way to
cure this HIV/AIDS virus. Furthermore, we can see that all of this big drug
companies are not trying to build a good relationship with the poor nations
since they are just giving a small discount from the original price. Therefore,
sub-Saharan African people still have a problem in order to buy this cocktail
medicine from GlaxoSmithKline and other big companies.
On the other hand, Indian company shows the opposite side reaction
from what the big drug companies did in responding this problem. Indian
company shows his care to people who suffered the AIDS disease and lived
in the poor country such as sub-Saharan Africa. This kind of respectful is
awarded to the Indian drug company since they showed their care feeling and
help the patient to get a long live and had a new life as a healthy person. This
action also showed that Indian Drug company created the good relationship
with other poor countries and nurtured their relationship since they were ready
to supply the medicine with a lower price to the poor countries especially subSaharan Africa and helped the WHO in order to supply the medicine that was
being used in AIDS treatment.

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Based on this care theory, we could see that Indian Company showed
their care to be involved in preventing the deployment of the HIV/AIDS virus in
all of the developing countries. This theory seems work to identify which
parties that involved were morally correct based on care theory.

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F. VIRTUE
In general, we know that virtue is very important in order to build a
good relationship with others. Virtue theory is more focusing on characters or
habit of each person. This theory is very hard to analyze because every
person has a different character and can be changed in many circumstances.
The major effect that can influence each person characteristic is the
environment where they live and their interaction to what kind of people near
his or her environment.
Based on Velasquez book, the author states that Virtue theory is An
acquired disposition that is valued as part of the character of a morality good
human being and that is exhibited in the persons habitual behavior. (Pg. 128)
This means that this theory is based on the characteristic of each people such
as virtue of honestly, virtue of feeling, and many others. In example, if we use
virtue of honestly, it means that this person has a very good attitude that this
person always tells the truth and will feel uncomfortable when he or she lies.
This is one of the particular that people, as a human being needs to have in
their life to build credibility from other individual or organization. This virtue
theory has four different ideas, which comes from a famous philosopher such
as Aristotle, Thomas Aquinas, Alasdair Macintyre and Edmund L. Pincoffs.
Moreover, in business ethics, the role of Pincoffs virtue theory is very
important in analyzing most of the case problem. Based on Ethical principle
in business book states, Pincoffs: virtues are dispositions we use when
choosing between persons or potential future selves. (Pg. 130) while he

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argues that, Virtues should be understood in terms of the roll they play in
human life. (Pg. 131)
According to the case above, GlaxoSmithKline Company and others
offered the medicine with high price and people who lived in developing
countries was hard to buy this kind of medicine. This situation would harm the
poor countries especially in humanitarian terms since everybody tried his best
to get more money getting the medicine for example, they could robe the
bank, stole others property and many criminality could happen at that time.
This company violated the virtue theory since virtue theory means, we
should avoid exercising, exhibiting, and developing vices. (Pg. 132) As we
can see, GlaxoSmithKline and other company did not show their good act in
helping poor countries to get the medicine because of their greedy nature that
they wanted to maximize their profit without thinking of other people life.
These companies were also lied about their financial since the reason they
did not want to reduce the price of the medicine because it could harm the
company and the company would not be able to continue the research to
develop this kind of medicine. However, based on the research, all of this
company still had a huge profit even though they were selling the medicine
with a low price to the poor countries. Based on the cases above, showed
that it was well within the capacity of the big drug companies to lower prices
for AIDS drugs to the developing countries... (abc NEWS cases) This kind of
action violates the virtue of honesty that becomes one of the main virtues that
is very important in order to maintain peoples character to avoid vices.

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In addition, this theory seems work to determine which party is shown
to be morally accepted based on virtue theory. As we can see that Indian Drug
Company showed their courage in helping the poor countries and honesty in
telling the truth that this company sold and copied the same medicine as the
big drug companies produced.

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G. CONCLUSION
Based on five theories that I explain above, there are many arguments
appeared since each of the theory has their own provision in determining
which is ethical or unethical. In example, in utilitarianism theory, we can see
that there are cost and benefit from each party that involved in this case. We
can identify very clearly the entire alternative that is shown in this case. In
Right theory, it shown that Indian Company respects the right of every people
to have a long life even though in poor countries. In Justice theory, we can
see that GlaxoSmithKline and other big companies received unfair situation
which Indian company was plagiarized their medicine formula without any
agreement or contractual contract. This situation could affect the
GlaxoSmithKline financial and decrease their profit. In care theory, we can
see that Indian Company seems showing their careness to poor countries and
help the countries to prevent the AIDS disease by producing the medicine that
can decrease the number of AIDS patient and change their life. In Virtue, it
seems that GlaxoSmithKline is violated the virtue theory since this company
showed their vices attitudes such as greedy, selfish, liar, and arrogant.
In my opinion, I think that Indian drug companies did the right thing to
produce the antiretroviral medicine to help poor countries. This action showed
that India had a sense of care to AIDS patient that lived in the poor countries.
On the other hand, GlaxoSmithKline and other big company showed their
selfish characteristic since this company just worried about their company
future financial rather than thinking about other people life. Therefore, I think

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that GSK was doing unethical action since they violated many ethical theories
that I have already explained above.
Based on the five ethical principles above, I think that the most useful
theory that can be used to analyze this case is virtue theory. As we see, GSK
Company violates all of the element that describes the definition of the virtue
theory. This company shows all of the vices, which is the opposite of the virtue
theory. The first violation that this company did was this company did not want
to make lower their price in selling their medicine in developing countries
because of the financial reason. This act shows that this company is greedy
since they just think about maximizing their companys profit rather than
thinking about other people safety. Second, this company violates the virtue of
humble since this company does not care about the patient who lives in
developing countries how painful they live without the expensive medicine that
this big company produced. GSK seems enjoy their huge profit over the AIDS
patient suffering. This kind of situation illustrate that the company is arrogant
and does not show their care to others.
In conclusion, GSK action to the sub-Saharan Africa region is
unethical since they did not show his respect to AIDS patients in developing
countries. According to the theory of virtue, each individual or organizations
needs to show their dispositions of good characteristic and stay away from the
vices characterization.