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 2-
recent 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 decision-

maker 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.