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Adding Value to Health Care

The Role of the Pharmaceutical Industry: Adding Value to Health Care

The primary function of the research-based pharmaceutical corporations is to create value by discovering and producing effective medicines, vaccines and services that improve patients' well-being, and can be sold in markets at a profit. As well as increasing shareholder value, this contributes significantly to the quality and protection of life and helps make the world a better place.
In the past 60 years, innovation and technology have driven huge improvements in global health. According to the Human Development Report 2010, growth in life expectancy that took over 300 years to achieve in developed countries has been secured by developing countries in just half a century, thanks largely to innovations in medicine and other public health interventions.
Intellectual property has played a key role in this progress. Discovering and developing a new drug, conducting clinical trials and gaining regulatory approval can cost around US$1 billion. Less than 1% of the compounds examined in preclinical stages are cleared for testing in human beings, and only 22% of compounds entering clinical trials successfully reach development stage and regulatory approval. Without patents, it is estimated R&D outlays would be reduced by 64%, jeopardizing the well-being of future patients and the innovation process itself.

Doing no harm and doing Good
Beyond innovation, companies hold a wider responsibility to 'do no harm,' by acting with integrity, complying with national laws, respecting human rights, applying fair labor norms, protecting the environment, and working against corruption to prevent harm to people, communities and future generations.
There is also a growing social expectation - and management conviction - that it is in a company's enlightened self-interest to 'do good' and 'be part of the solution,' for example by supporting social, ecological, cultural, or other projects and programmes. These are voluntary actions undertaken because the company feels it ought to - or can - make a difference, particularly in areas closely linked to its core business expertise. To ensure sustainable success, corporate responsibility activities have to be professionally managed, with clearly defined objectives, cost-effectiveness, performance monitoring and accountability, as well as transparent communication.
Among the benefits to a business of adopting this wider sense of corporate purpose are the ability to create new markets and healthier, more productive societies, earn reputational capital; attract quality employees and socially responsible investors; build constructive stakeholder relationships; and enhance business intelligence.

WorldBI Author

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