Background of Research

Progress in the pharmaceutical industry contributes to significant developments in the field of medicine and, consequently, to the quality of health care services in the country. A number of factors facilitate breakthroughs in the pharmaceutical industry such as access to resources or funds and the availability of data, but progress in the field could be attributed largely to medical research. In the United States, public and private entities conduct clinical trials to determine the potency of new and improved drugs. The Food and Drug Administration (FDA) is responsible for organizing clinical trial procedures and protecting the rights of human volunteers, while the Institutional Review Board (IRB) oversees research and clinical trials. Although both institutions implement high standards and regulations and demand full compliance from medical researchers, the industry is troubled because of unethical practices that surface during and after the evaluation of medical research practices. Conflict of interest on the part of pharmaceutical companies is one of the major problems faced by the industry, because unethical practices in research jeopardize the health and safety of consumers. The commercial aspect of managing a pharmaceutical company is a major factor that motivates companies to follow unethical practices. Considering these facts, research objectives include:

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  1.  The identification of ethical issues in the pharmaceutical industry;
  2. The review of existing literature about those issues;
  3. The identification of standards or measures implemented by private pharmaceutical companies to maintain and uphold moral values and practices; and
  4. The evaluation of nonprofit business models and whether they could be implemented by medical researchers to avoid conflict of interest.

Research Question

How can the implementation of nonprofit business models by medical researchers prevent or address the issue of conflict of interest?


Conflict of interest in medical research could be avoided if medical researchers implement nonprofit business models in their practice.


The primary objective of the study is to determine whether the application of nonprofit business models in medical research would prevent conflict of interest. Specific objectives include the identification of other ethical issues in medical research and existing practices in the industry that pharmaceutical companies apply to uphold ethics and transparency. The researcher hypothesizes that conflict of interest in medical research could be avoided if pharmaceutical companies implement nonprofit business models.

The qualitative approach will be conducted to address the research question and prove or disprove the hypothesis. The study will conduct secondary research by reviewing existing literature about ethical issues in medical research and exploring how medical researchers could adopt nonprofit business models in their practice. Secondary sources, which include academic books, scholarly journals and peer reviewed articles will be consulted during the research process. Data would be gathered by conducting an online search of secondary sources related to the topic and consequently reviewing existing literature and selecting sources that would best answer the research question and address the hypothesis. Data analysis will be conducted by documenting existing literature about the application of nonprofit business models in medical research and analyzing whether the data is significant in proving or disproving nonprofit business models as solutions to the increasing ethical issues in the medical research.


According to Dana (2009), financial conflict of interest is a common issue in medical research. Conflict of interest occurs when medical researchers like physicians accept funding from pharmaceutical companies to support their research or further education. Dana (2009) insists that medical researchers who do so are corrupt, because they put their interests first, which is against their oath to “put their professional obligations first” as health care providers. Similarly, pharmaceutical companies that meddle with medical research are violating ethical standards and guidelines in the field. Auerswald (2012) stated that the dominant business model (revenue over quality and integrity) implemented in pharmaceutical companies enables them to participate in unethical practices.

Medical researchers could avoid conflict of interest if they follow nonprofit funding models. Medical researchers could focus on establishing a revenue mix, evaluating and controlling infrastructure and expenses, implementing cost-effective programs, and developing a capital structure. Medical researchers could establish their own resources by studying revenue growth. “Revenue growth is accomplished by developing reliable systems and relationships geared to those sources” (Nonprofit Assistance Fund, 2010). Nonprofit organizations also implement cost-cutting measures and cost-effective practices to curb their expenses. Nonprofits often “take a hard look at how they have operated in the past and look for ways to change the expense structure while maintaining vital structure.” Moreover, medical researchers could establish a capital structure by conducting events and programs to increase funding such as “fundraising, capital campaigns for buildings and endowments, and budget surpluses” (Nonprofit Assistance Fund, 2010).

Aside from medical researchers, existing literature proves that pharmaceutical companies should also adopt nonprofit business models to prevent conflict of interest. OneWorld Health is a non-profit pharmaceutical company. Large and small-scale pharmaceutical companies and public institutions in the field work with OneWorld to conduct clinical trials. Since OneWorld is a nonprofit organization, it is a non-biased entity that facilitates medical research and ensures that it would contribute to the development of drugs that suit the needs of human beings, especially in developing countries. The objective of OneWorld is not merely to facilitate medical research but also to urge pharmaceutical companies to create affordable drugs for the underprivileged (Wong & Dutfield, 2010; Finkelstein & Temin, 2008).

Conclusion and Recommendations

Nonprofit business models offer various strategies and approaches that medical researchers could apply so they could avoid conflict of interest by receiving funds from pharmaceutical companies. Nonprofit business models endorse independent and resourceful practices that medical researchers could implement so they could gain their own funds through fund-raising activities by cutting cost and controlling expenses. Aside from medical researchers, pharmaceutical companies should also adopt nonprofit business models so they can avoid unethical practices in their organizations. The researcher would recommend a thorough evaluation of nonprofit business models by medical researchers and pharmaceutical companies leading to a restructuring of their current strategies and practices with the goal of upholding ethics and social responsibility in the workplace. Further research should focus on the identification or creation of theories and models that would guide medical researchers and pharmaceutical companies through their transition to nonprofit management.

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