Their profit, whose loss?
| Author | Brown, Mike |
| Position | Brief Article |
The pharmaceutical industry is the most profitable in the world, but is its monopolistic stance socially responsible and does it really encourage innovation? Mike Brown argues the case for a more ethical approach
Management textbooks proclaim that businesses should conduct their business ethically, legally and in a socially responsible manner. In other words, they should make sure they are seen to be doing business with LEPEST & CO firmly in mind, ensuring that:
* they trade Legally;
* they are Ethical in their dealings;
* they are Politically aware;
* they are conscious of the Economic consequences of all of their actions;
* they are Socially conscious of their business affairs;
* Technological developments are tracked and, where appropriate, brought into management systems;
* Competition is monitored and researched so that management planning and decision-making can be altered accordingly.
Does trading ethically simply mean behaving in a "correct" way, taking account of environmental and minority group issues? And does the desire to generate profits dilute the drive to trade ethically?
It is said that the world's three most profitable industries are prostitution, narcotics and pharmaceuticals. Given that the public image of prostitution and narcotics does not readily associate itself with strong moral and ethical standards, where does the pharmaceutical industry stand in the ethical profits league table?
Pharmaceuticals is by far the most profitable of all the world's major industries and no one else comes close to its median 35 per cent return on equity. Worldwide, the industry generates more than $6 billion a year in profits, and market leaders generate wealth that makes the profits of BT, Unilever and Coca-Cola look like small change.
The world's pharmaceutical companies make most of their profits from the US, Europe and Japan. The developing world is not a profitable trading area for them, because poorer countries do not have the economic resources to pay for all the drugs and medicines they need.
A recent Oxfam report accuses the major pharmaceutical companies of exploiting the poor in the developing world. The report attacks the protectionist stance of the companies -- they guard their patents vigorously -- and claims that those in need are being denied access to cheap, generic pharmaceutical products which could help to save millions of lives each year.
In other markets, the existence of large, profitable enterprises would have...
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