In When Principles Pay: Corporate Social Responsibility and the Bottom Line, Geoffrey Heal examines the question of whether profit maximization is compatible with policies that support social and environmental goals. Looking at a range of companies and industries, Heal considers how corporations have trampled over the public good and the growing movement among businesses to become more socially conscious. Ultimately, Heal shows how Corporate Social Responsibility (CSR) can fit into a corporate strategy and lead to a better bottom line.
In his chapter “Pharmaceuticals and Corporate Responsibility,” Heal takes a closer look at an industry with a very bad reputation in terms of social responsibility. Heal points to the many misdeeds of the pharmaceutical industry but also highlights recent efforts taken by companies to lower prices and expand access to drugs both in the United States and around the world. Heal concludes the chapter by laying out the challenges facing the pharmaceutical industry:
What is the socially responsible policy for the pharmaceutical industry? Unquestionably, the industry has to put patient welfare clearly above profits, as George W. Merck suggested, and has to be seen to be doing so very clearly. Without this, it will lose the support of the public and governments, which will cost it and its shareholders very dearly in the long run. Putting patient welfare first has implications in several areas, including drug testing and drug pricing. In testing, the industry must clearly operate at the highest level of transparency, making all safety-related information publicly available. In pricing, the industry must recall that society expects all who need them to have access to its products and price accordingly. In the United States, in the absence of radical changes in the health insurance system, this will mean a great extension of operations such as Together Rx Access, but again in a more transparent way and with as much effort put into advertising these as now goes into DTC advertising of some proprietary drugs. Using differential pricing for different income groups, as in access systems such as Together Rx Access, is in fact a natural and potentially profitable response on the part of sellers to a situation where buyers differ widely in income levels and the ability to pay.