Athena-op Ed 3- W6-social Responsibility.docx

Athena Le- Op Ed 3 Week 6- Social responsibility Over a night, what could radically change? Everything, including price of a life-saving drug. It is the case of Daraprim under Turing Pharmaceuticals. The drug which is used in life-threatening parasitic infection for people with HIV or with weakened immune system got its price increase 5,000% from around $13.5 per pill on the previous day. Given that there is no equivalent alternative to the drug, a population of vulnerable patients could not afford any more for their treatment due to monthly expense rocketed to thousands of dollars. Shkreli, the CEO who made the decision reasoned that his decision should not be challenged because he is fulfilling his responsibilities to benefit the company’s shareholders, to foster its growth and to prepare financially for promising drug research and development. Do business practices legally accomplishing organizational responsibilities justify their impacts to society? Some business people support that business decision makers should focus on maximizing profits and shareholder value as long as practicing it legally and that keeping ethical standards on social impact seems out of scope. Others would dispute that CEOs are required to conduct business considering social responsibility as essential as financial performance. On the grounds that the case involves social impact, I look at it from the lens of utilitarianism. Who are stakeholders for this action of brash price increasing? When asked if he would change his mind to raise the price of Daraprim, Shkreli insisted that he would even have been more aggressive to made a greater benefit to the company’s shareholders? From Shkreli’s perspective, shareholders simply are ones who invest in the company and performing to benefit them is the best a CEO can do. However, it’s a deficient definition of shareholders. They should include employees working for the company, the patients that the drug are aiming to and the society in which the company operates. It is fair that this pharmaceutical should price the drug to be profitable, but more than $600 incremental revenue per pill would destroy life of thousands of patients who are thriving every single day for these tablets to survive, and without question, the excitement by gaining some more dollars which investors could have from this deal would never compensate the misery that their fellows are suffering. Moreover, when it comes to the issue of benefit to ones who invest to the company and employees who work for it, I believe that majority of these stakeholders prefer sustained returns and growth instead of giant income which lasts only for quarters or years. In that case, the decision that raises public backlash against its negative influence on the society would ruin the reputation of the company and market adoption of future drugs which this company will commercialize. Employees also feel demotivated to devote to the company that do not support them to follow the value of humanity while ironically, it is a healthcare organization. Obviously, the profit that the CEOs has mentioned seems to be diminished in the long run. I can take an example of Valeant Pharmaceuticals, which had the similar action of price adjustment by adding around 200% percent to its 2recent acquired life-saving drugs and then, see its stock value drop 91%. So, from consequentialism’s standpoint, beside short-term profit to some investors which then turn to be a loss to their long-term investment, this decision of dreadful price modification hurts almost all stakeholders.

Is there any chance that if we look at this decision from another perspective of ethical reasoning, we could tolerate Shkreli’s stand? Is his duty as a CEOs that is to do anything to benefit the company? If that’s the case, is it ethical for Shrekli to follow business practices what he considers his primary responsibilities? It’s the question which duty is the right duty to follow? Duty to a business or duty to the society? The society is not only applicable to the number of patients in need of Daraprim, it is the society of people caring about well-being and humankind. Every business is a part of the society, so ultimate purpose to run a good business should be to contribute to the greatness of the society. In different word, if your business is ruthless making use of others to be profitable, it would come to its termination around the corner under social counterattack. Shkreli would want to think again about his aggressive pricing approach because neither his duty to the company is fulfilled in this case. In conclusion, the case of Turing Pharmaceuticals is only an instance when decisionmaker in business organization find conflict between ethics involving the society and profits involving internal stakeholders. From my perspective, social ethical stand should not be considered an obstacle to the organization’s growth. On the other hand, provided that business could not exist outside the society, leaders should align social responsibilities to its code of conduct and employ these practices as leverage to market adoption for the company, increasing value proposition for its stakeholders in term of sustainability.