Monthly Archives: September 2017

The Equifax Fallout

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Equifax, a credit company which handles private information is experiencing fallout from failing to adequately secure information. The company’s problem began in March 2017 when a hacker managed to enter the system.

The company detected the breach July 2017 and notified the public September 7th. Why did it take two months to learn personal data was compromised? According to CBS news, Equifax executives sold nearly  $1.8 million of company shares before disclosing the breach. How is this fair, ethical and equitable? To me, this is alarming; those who purchased the shares were scammed. Consequences have yet to be decided because “Canada’s privacy laws do not specify the measures” (Ligaya, 2017, para 17 ) it takes once being hacked. Companies responsible for sensitive data must have a duty of care to those whose information they hold.

Through my research the Equifax fiasco is a people problem, not purely a system problem. Equifax neglected to implement sufficient safety precautions. Weak internal controls such as poor supervision, documentation and lax security lead to loss of critical information. Equifax should have reacted to the breach as Canada Revenue Agency did when its system was hacked in March 2017. CRA instantly shut systems down, identified and fixed the security rupture and quickly restored operations. These proactive steps, perhaps unprofitable at the time, dealt responsibly with the issue. Dissimilarly, Equifax waited two months to react and inform the public; unacceptable as customers identities and finance were at risk.

Large companies like Equifax are not worried when fined $100,000; the fine is inconsequential compared to their billion dollar revenues. I believe the government needs to devise strategies to regulate and adequately fine companies entrusted with valuable personal information. To source exactly where the problems rooted and aim to fix the following results, Equifax could have used business tools like the Fishbone diagram or the urgency/importance grid to identify and highlight possible causes or actions to the situation. Data companies should have plans to prevent or at least mitigate such disasters. Ethical decision making directs companies away from issues such as breaches and fraud. If Equifax had identified and disclosed the issue, analyzed exactly what went wrong and recommended positive actions to take, the company could have minimized the extent of the damage. Consumers now need to be vigilant while viewing their statements and charges.  Problems and mistakes are inevitable, it is how a company deals with them that defines it. I hope the market and consumers will ensure Equifax is penalized for its inability to protect data as regulators, at present, do not have tools to do so.

Word Count: 423

References:

Bouw, B. (2017, September 21). The latest: What you need to know after the Equifax security breach. From https://beta.theglobeandmail.com/globe-investor/personal-finance/household-finances/the-latest-what-you-need-to-know-after-the-equifax-security-breach/article36323162/?ref=http%3A%2F%2Fwww.theglobeandmail.com&%29

Braga, M. (2017, March 14). What you need to know about Canada Revenue Agency’s ‘internet vulnerability’. From http://www.cbc.ca/news/technology/canada-revenue-agency-cra-internet-vulnerability-bug-apache-struts-2-1.4023838

CBS. (2017, September 08). Equifax executives sold $1.8 million in stock after breach.  From https://www.cbsnews.com/news/equifax-breach-executives-sold-1-8-million-in-stock/

Cuban, P. (2017, September 24). Intro to case methodology. From https://vimeo.com/48866088

Finkle, J. (2017, September 21). Equifax says server first compromised on March 10. Fromhttps://www.reuters.com/article/us-equifax-cyber/equifax-says-server-first-compromised-on-march-10-idUSKCN1BW05X

Kerner, S. M. (2017, September 22). Equifax data breach fallout continues as lawsuits are filed. From http://www.eweek.com/security/equifax-data-breach-fallout-continues-as-lawsuits-are-filed

Ligaya, A. (2017, September 18). Equifax to reveal Canadian impact of data breach this week as executives face insider trading probe. (Image)  From https://www.thestar.com/business/2017/09/18/hacked-equifax-executives-face-insider-trading-probe.html

 

The Ethical Epi(Pen)demic

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The article “EpiPen price furor heats up in U.S.” as reported by CBC News illustrates the necessity for governments to regulate drug pricing. In the United States, Mylan Pharmaceuticals, a private enterprise increased the price of EpiPen devices to maximize profits; a strategy common in the marketplace. The new US pricing is unaffordable to many individuals with severe allergies and subsequently will lead to loss of life. The increase in price of the EpiPen 2-pak could decrease consumers’ ability to keep an extra life saving product in their pockets. Society must prioritize life ahead of profits; companies that provide a life saving product for emergencies should not be allowed to uncontrollably bump up prices. “The 400 per cent spike in the price of EpiPen devices” (CBC News) is outrageous and unacceptable. Government intervention is necessary for communities to be protected from avaricious producers. 

Canada was not affected by the 400% increase in price for the EpiPen because of existing regulations. “We feel that everyone should have access to life-saving medication and that cost shouldn’t be a barrier” (Povolo, CBC news). In the US, if life saving drugs are not subject to regulations,  suppliers will be tempted to maximize prices.

This is not an isolated incident. In 2015, Martin Shkreli, founder of Turing Pharmaceuticals purchased the license for Daraprim and thereafter raised its price from $13.50 to $750.00 per pill. Lack of ethical business practices was pervasive in his dealings and he was “arrested by the FBI after a federal investigation involving his former hedge fund and pharmaceutical company he previously headed” (Nate Raymond). Situations similar to Shrkeli’s and Mylan Pharmaceuticals will continue to arise unless regulated. Some like Martin Shkreli may argue that maximizing profits on drugs helps patients in the long run as more profits will further research development. More investors will be attracted to the sector and more effective drugs will potentially be produced. But how many lives will this cost due to unaffordable pharmaceuticals? How can society be sure  these excessive payments will fund research and not instead line pockets of greedy investors? Government regulations protects society, creates barriers and helps to deter investors with questionable business ethics  from entering the pharmaceutical industry.    

 

Sources:

Martin Shkreli, Who Raised Drug Prices from $13.50 to $750, Arrested in Securities Fraud Probe. (n.d.). Retrieved September 12, 2017, from https://www.scientificamerican.com/article/martin-shkreli-who-raised-drug-prices-from-13-50-to-750-arrested-in-securities-fraud-probe/

C.News, C.(2016, August 24). Drug price hikes can damage company reputations: White House on EpiPen furor. Retrieved September 12, 2017, from http://www.cbc.ca/news/health/epipen-price-1.3734214

Japsen, B. (2016, August 25). Doctors Demand Mylan Lower EpiPen Price For Everybody. Retrieved September 12, 2017, from https://www.forbes.com/sites/brucejapsen/2016/08/25/pressure-mounts-on-mylan-from-doctors-to-lower-epipen-price/#3266baa23b1a

 

 

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