Novartis, H1N1 Vaccines, and “Solidarity” With the World’s Poor
Let’s be clear: I am in favour of free or cheap access to life-saving pharmaceuticals for all. Ensuring universal access is both compassionate and pragmatically wise. Finding the right mechanism — one that’s both effective and fair — is the hard part.
From Reuters: Novartis says won’t give poor free H1N1 vaccines
Swiss drugs company Novartis (NOVN.VX) will not give free vaccines against H1N1 flu to poor countries, though it will consider discounts….
The director-general of the World Health Organisation, Margaret Chan, has called for drugs companies to show solidarity with poor countries….
Why appeal to Novartis (and other drug companies) to subsidize vaccines? Recall that, in reality, appealing to publicly-traded drug companies means appealing to their shareholders. Why not appeal to the shareholders of Exxon, or Microsoft, or Walmart? Those companies don’t make drugs, but they do make profits, profits that could be handed over to Novartis to pay for vaccines. Or why not appeal to the citizens of developed nations, more generally? Why ask some citizens — namely shareholders, not necessarily wealthy, of one or a few companies — to give more than the rest of us seem willing to?
Solidarity and charity are lovely, and easy to support when they’re going to cost someone else money.
The Business Ethics Blog 
If a company is to remain viable then they must balance the stakeholders in the orginization. These interest are essential to a corpration longterm sustainability.If the shareholders are of the gretaest concern then the outcome will lead to abuses within the system.Corprate resposibility must take into concern all the stakeholders in the firm equeally.(Carillo, 2007, pg. 98-99) As we have seen in our recent finacial crisis the need to maximixe profits in the short term led to grave consequencies in the longterm.
The action will be seen by other businesses as Norvratis being company that only cares about thier shareholders. This will make the gaining of other entities to pay for something that the company should be doing internally to aid the the underdevloped countries helthcare industries. Norvratis will pay much steeper price in the long term because other stakeholders may cease thier imput.(pg 99)
How would other stakeholders know if thier money is being used to aid the people it is intended for. Would the money then be seen as increasing the corprate profits and thereby increasing shareholders value with very little going to the intnded to source? Those are the questions that the giver would be forced to answer.
Carillo, Elena F. Perez Corporate Governance: Shareholders Interests and Other Stakeholders Interest, Corporate Ownership&Control Volume 4, Issue 4 Summer 2007, pg 98-99
Right! Appeal to anybody’s money should be legitimate. Anybody could be asked to help here.
However though,
Novartis’s business is drugs and vaccines, so I understand. So they are the best placed to lead / contribute to a vaccination campaign. I would firstly call upon an oil company to clean oil spills, on a software company to eliminate viruses, on a supermarket chain to distribute fair trade products, etc… As a shareholder of any of these, I should once and for all accept that the company I invested in has to contribute to the common good in its own field of expertise. Why should I own the profits and be exempt from social responsibilities ? Such a narrow, schizophrenic view of shareholding should now be seen as pertaining to our “old world”, you know, this economic world that collapsed in 2009-2010.
This being said, I as a Novartis shareholder (I am one!) should be treated fairly. It’s OK to lend some of the expertise and resources of the company to fight an unusual challenge to human health. It’s not OK to put the company at risk, make its life impossible, produce things for free. I think selling H1N1 vaccine at cost to poor countries, together with my fellow competitors, would be fine. I would also accept playing “open books” on this with the WHO or any other organization active on the issue, and helping the medical community to launch funding appeals on the subject.
Darryle:
Balancing stakeholders is fine, but that on its own doesn’t imply giving products away for free.
Most of what you’ve said above constitutes prudential advice, rather than ethical advice — which is fine, but we should be careful not to confuse the two!
Chris.
Pascal:
It may well be right to say that special expertise brings special responsibilities: if there is an obligation, say, to *develop* a vaccine, that obligation must fall to drug companies, not to oil companies. But if what’s required is money to *pay* for vaccines, both drug companies and oil companies have *that.*
(More generally, I don’t know of any good argument supporting the idea that companies have to contribute to the public good, beyond the contribution they make by providing products and services that people want. But that’s a bigger issue, for another day!)
Regards,
Chris.
I accidentally *rejected* a comment I meant to *approve.* Apparently Blogger won’t let me undo that mistake. Here is the text of the comment, with my apologies to Diego!
Diego wrote:
Though I agree that everyone should put up his money to solve this kind of issues, I wonder if there is no special responsaility in the pharmaceuticals in this particular case. Saying that there isn´t any is admitting, I bealive, that how you get your money is, in the best scenario, accidental. I bealive that if accept the principle of subsidiarity then you should accept different degrees of responsability according to your abilities.
I don´t think they should give anything for free, that´s no equity, perhaps giving away special prices is the responsbale thing to do.
Should a teacher or prof donate preferentially to education charities, because of his job, or to charities he thinks will do the most good?
Should a plumber donate to charities that promote sanitation, because of his job, or to charities he thinks will do the most good?
Should a baker donate to charities that hand out bread, because of his job, or to charities he thinks will do the most good?
It is too simple to expect medical companies to give medical supplies and doctors to volunteer time. Sometimes all we can give is a little.
If a MD gave money to Doctors without Borders, they wouldn’t turn it down and say “No donate your time instead”. They would say “Thanks!”
Mrs A:
Not sure I understand that last part. I mean, I understand what you’re saying, but not sure what you’re reacting to. Of course Doctors Without Borders wouldn’t turn down the donation. Did someone above imply otherwise?
Chris.
I don’t mean to imply someone turned anything down. I’m sorry I was unclear I merely mean take what you can get and say thanks.
Thank you for posting my comment. On the other hand, as a response, I would say that it´s at least preferable that people donate, as long as it is with expertiese, to whatever they are good at. If exxon moved his charitable resources and placed them in health maybe it wouldn´t make half the good as if a pharmaceutical did it. On the other hand, if the pharmaceutial invested in new energetic technologies problably they wouldn´t be as efficient as well. Of couse, if they donate with hard cash it doesn´t really matter, never the less I bealive it´s bettr if they invest their efforts in things that can make the biggest difference.
Thanks again for reposting my previous comment.
Should pharmaceutical companies be ‘for profit’ in the first place?
Isn’t that what sways higher production of baldness and sexual impotency meds instead of ‘more important’ medicine?