Drug Company Profits

In Washington, no other industrial lobbyists wield as much power as the Pharmaceutical Research and Manufacturers Association (PhRMA). Because of this, drug company profits continue to soar and are easily deflected by the aggressive efforts of the lobbyists who tout the good work of the drug companies: the proliferation of new discoveries, success in fighting off the threat of domestic price caps and competition from generic manufacturers producing cheap copies of its drugs.

If you’re like most Americans, you assume drug companies’ business corporate ethics lead them, along with treating physicians, to save lives. Yet there are many instances of deaths each year, either because people cannot get the right treatment, or they receive the wrong treatment. And there are many other examples of people who receive treatment then suffer from devastating side effects.

Why? Because the drug companies' shareholder model of corporate governance is about maximizing profits rather than meeting the needs of their customers. And this mind-set, according to Martin L. Hirsch, author of “Side Effects of Corporate Greed” is misaligned and needs to be reformed.

A Misalignment of Priorities


Drug companies are in need of reform due to a misalignment of their priorities to that of their customers. Corporate governance in drug companies focuses on the shareholder’s bottom line, which is completely inconsistent with health care, medicine and access to pharmaceuticals, where the patient should come first.

Instead of following a shareholder model of corporate governance, they must adopt new governance guidelines that place patient health as the highest value and priority. It would positively shift the corporations’ duty from maximizing shareholder profits to considering, and providing for, customer and community needs.

It’s About Time: The Stakeholder Model


The stakeholder model would mandate broader duties beyond those owed to shareholders of the corporation. It would integrate economic, environmental, and social concerns while addressing both shareholder and stakeholder concerns. The stakeholder model would refocus corporations to make decisions not only based on drug company profits, but also on the human rights and community consequences of the corporation’s actions.

If you have been victimized by drug company profits, let Seeger Weiss help. We recently won a 5th verdict against Accutane for the debilitating side effects experienced by our clients.

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