Does social responsibility need to be aligned with creating corporate profit?

Apr 14, 2021

In an effort to create societal value, many companies engage in important corporate social responsibility (CSR) initiatives. Unfortunately, admirable as these activities often are, they are not always easy to sustain. From a traditional business perspective, such societally beneficial projects are often considered a cost, and the cost side of a business equation is forever vulnerable. However good a company’s intentions, many CSR programs ultimately depend on the commitment of current management and the profitability of the core business. When we say the words “Big Pharma” outside of the industry, images of life-saving drug discoveries rarely come to mind. Whereas, the public perception of pharma is often shaped by issues like drug costs, prescription drug abuse, the supposed dangers of vaccines, or corporate greed.  In the collective imagination, the pharmaceutical industry develops, manufactures, and sells drugs to cure diseases, but defining illness is not always its mission. Generally, the medications produced by drug companies target diseases that have been defined previously by the medical profession. However, pharmaceutical companies harbor a high degree of social responsibility through the products (medicine, food supplement, and medical devices) that are made available to the general public. Access to these products can make the difference between life and death. Additionally, there are several indirect ways in which pharma companies contribute to harnessing social responsibility by raising patient awareness about diseases and sharing its know-how with the public. It comes to my awareness that when one reads an article regarding big pharma, the question that usually springs to mind is that they solely aim at maximizing corporate profit. To address such a statement, we have to initially begin with the importance of increasing profits in order to generate revenue to further innovate and develop new mechanisms to alleviate pain and cure patients.

Let’s bear in mind that in order to create benefits for society, pharmaceutical companies must continue to operate in their own self-interest. Novo Nordisk and Novartis is an example worth mentioning, Novo Nordisk is collaborating with government and civil society stakeholders in India, Indonesia, and Bangladesh around diabetes prevention, diagnosis, and treatment. Novartis set up an innovative distribution and sales network across rural India to provide access to a portfolio of essential medicines to underserved populations. We have highlighted the profits of pharmaceutical companies, yet, we still have to emphasize the growth aspect of it. The growth that every company follows to generate significant positive cash flow and earning. A model brought up by Unilever COO – Harish Manwani is worth mentioning when it comes to growth when he highlighted the most important three figures and called the 3G model:

  • The growth that is consistent; quarter on quarter
  • The growth that is competitive; better than other companies
  • The growth is profitable; so you continue to increase shareholder value

There’s a missing ingredient in this formula, the ingredient that will change the whole equation and will lead firms to generate more profits and create a better society if applied correctly. The missing ingredient is “growth that is responsible” which will lead to the 4G model. Social responsibility has been seen as an integral part of corporate business purpose. We are talking, in particular, of the profound need to raise awareness, both for customers and employees, and the consequences that the company’s actions can potentially have towards the community and, last but not least, the planet itself. Small and medium-sized companies have been involved in social responsibility long before the term “corporate social responsibility” was coined. They didn’t necessarily broadcast their practices and did them for altruistic reasons, not realizing there were business advantages, too. Every action has a reaction, even if the action is small, when repeated can have a greater impact and raise awareness, generate word of mouth and trigger a chain of reaction. This reaction could be a movement, campaign, and even a real cultural change. Let’s talk about the “#idontwait” campaign, it’s a campaign created by a small-medium-sized pharmaceutical company called Lo.Li.Pharma international to raise awareness among women suffering from uterine fibroids, one of the most common gynecological diseases, the fibroid can affect around 25-80% of women and many women don’t even notice they are developing a uterine fibroid. This campaign now became international and use many social media platforms (Facebook, Instagram, and LinkedIn) to reach the female population and guide them through how to recognize the main symptoms, the possible alarm bells, and guide them in the management of the pathology and avoid surgical procedures due to wait and see decisions by HCP. The pharmaceutical industry contributed a total of €206 billion in gross value added (GVA) to the EU’s economy in 2016, which leads to €27 billion In productivity gains for the European Union economy and most importantly €13 billion in healthcare cost savings due to avoided complications.

Conclusions

Based on the gathered research in this article, social responsibility and corporate profit must go hand in hand. In order to create a healthier society, we must create awareness of the importance of economic profit in order to further cultivate medical innovation and development. Actions implemented by small to medium size companies could contribute to alleviating health complications.