“Oklahoma State wins case against drugmaker in historic opioid trial”
That recent headline was startling, financial and reputational damage to a major pharmaceutical firm seems incalculable. The profits made from opioid pain relief drugs were huge and, it was argued, have carried on for two decades.
The UN reports that Americans consume more than 99% of world opioid prescriptions. These drugs have brought benefits. But the consequences for society have been severe too, it was claimed, as a reported 130 Americans have died every day from opioid overdose.
Remember that the US drug industry had problems inflicted upon it in 1982, when an unknown member of the public injected some bottles of Tylenol (a pain reliever similar to paracetamol) with cyanide. Seven members of the American public died. The pharmaceutical firm which produced Tylenol recalled their complete stock of product and reintroduced it in a triple sealed pack, regaining 65% of their market within 6 months, while maintaining their strong reputation as a highly ethical company. It had spent over $100 million in this process.
In both instances (Oklahoma opioids and Tylenol) the same firm was involved, Johnson & Johnson.
Clearly things have changed at J & J. Or is it that ethical standards in many businesses are perhaps more difficult now?
While there may be ethical shortcomings in one company or one industry, it is heartening to learn that a group of top CEOs from Business Roundtable says maximizing shareholder profits can no longer be the primary goal of corporations. Showing 181 signatures of executives representing many of the largest companies in the US (including the chairman of J & J!), the statement* says in part, “…balancing the shareholder’s expectations of maximum return against other priorities is one of the fundamental problems confronting corporate management. The shareholder must receive a good return but the legitimate concerns of other constituencies also must have the appropriate attention. (…)|” This statement comes at a time of widening income inequality, rising expectations from the public for corporate behaviour and proposals from Democratic lawmakers that aim to revamp or even restructure American capitalism. But this shows that ethical leadership can have bite.
It is heartening indeed that within the current political and business climate, many industry leaders commit themselves to viewing the purpose of the corporation as being considerably larger than just making profits for shareholders. And that these individuals are concerned about what is often the most difficult of ethical problems when measuring profit against other concerns: ‘What is the right thing to do?’ Are these the types of companies in which you would feel comfortable to invest directly or indirectly through savings and pension funds? I would and, I am sure, so would many others.