May I see your social license to operate?

Recently, a few pharmaceutical firms seem to have overstepped the unwritten boundaries of their social licenses to operate. Turing Pharmaceuticals and Valeant in particular have attracted the ire of Democrats – and also more formally a subpoena by US prosecutors – after raising prices of critical drugs those firms own by staggering amounts. Neither firm has a reputation for heavy investment in cutting-edge research and developments to bring new cures to market. Instead, the incremental profit is solely directed at the shareholders’ pleasure. These interventions may be aided by the timing of presidential elections looming next year but nonetheless, it is refreshing to see that social licenses do get checked from time to time and offenders get pressured to rebalance their dedication to all their stakeholders, not just the bottom line at all cost (which really only helps so much when your market valuation tumbles). Turing announced on October 15th limits to their price increases that appear more palatable while Valeant announced just this morning a change in pricing strategy due to market pressure after attempts to cloud the increases in a misunderstood business model and a shoulder shrug accompanied by a comment that shareholders come first failed to convince the critical thinkers.