EXTERNAL DELIVERY - Social Responsibility

This article is not a lesson in economics, although the way it starts out, you would believe that it is. Not so. The free enterprise system is one of the many great factors that drive our economy. A free enterprise system has five main principles: freedom of choice, the right to private property, making and retaining profits, competition in the market, and consumer sovereignty. Free, as in Free Enterprise, means simply that you are able to run your own enterprise (business) without any substantial restrictions from the government.

One very important factor in free enterprise is that products and services and their associated pricing are determined by the market. The government really has no say in what your company does or produces except for illegal activity and assets that are for national security.

All of that said, what’s all the ruckus about with these two companies, Mylan, maker of the EpiPen, which raised the cost for a pair of EpiPens over $600, and Turing Pharmaceuticals, maker of toxoplasmosis treatment Daraprim, which raised its price by over 5,000%?

In the two paragraphs above this one, it is clearly stated that pricing for products and services is determined by the market. So if Mylan and Turing Pharmaceuticals can raise their prices to an exorbitant level, that’s their decision right? I mean, if no one wants to pay their prices because they are too high, then so be it.

Yes, but suppose the two products in question are patented, are sole sourced by the two aforementioned companies, and are life-saving. People are alive today because of the usage of these two life-saving products throughout the years, but many can now no longer afford them. This is where social responsibility comes into play.

Companies are not tangible things that exist unto themselves. Companies are formed and run by people, thus the company is the people. So it’s not really Mylan or Turing that set these exorbitant prices, it was the people in the companies who did this, and in particular, the CEOs.

Mylan has a code of Business Conduct and Ethics. It states in part: “We will continue to address patients’ unmet needs and provide them with access to our products virtually anywhere in the world. Because of this unwavering commitment, we believe we can unlock additional value for patients, customers, shareholders, and our employees, without compromising the quality of our products or the integrity of our enterprise, and become the most efficient global generics and specialty pharmaceutical company in the industry.”

Not if you’re going to raise the price of a life-saving drug over $600, resulting in a significant amount of people having to forgo buying the drug.

Turing has a set of guiding principles and a Vision. The vision states in part: “Our mission is to identify and implement sound, flexible, and easy-to-use solutions that enable users information to make faster and more informed business decisions. We can do this by achieving the highest levels of passion, performance, and professionalism. The higher we set our sights and standards, the better we serve the people we care most about.”

It looks as if the people they most care about are themselves. I mean they did raise the cost of their life-saving drug over 5,000%.

So in my opinion, the CEOs of these two companies failed in their social responsibility and thought only of their immense personal wealth that would be the result from these outrageous price increases. I guess they forgot to read their codes of conduct and vision statements.

John A. Bermingham is former Executive Vice President & COO of 1st Light Energy & Conservation Lighting, Inc. and former Co-President and COO of AgraTech, a biotech enterprise. He was also President & CEO of Cord Crafts, LLC; President & CEO of Alco Consumer Products, Inc., Lang Holdings, Inc., and President, Chairman, and CEO of Ampad, all of which he turned around and successfully sold. With more than 20 years of turnaround experience, he also held the positions of Chairman, President, and CEO of Centis, Inc., Smith Corona, Corporation, and Rolodex Corporation as well as turning around several business units of AT&T Consumer Products Group and served as the EVP of the Electronics Group, and President of the Magnetic Products Group, Sony Corporation of America.