Comment by fozzieBoston | Hacker News Reader

Comment by fozzieBoston | Hacker News Reader

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Cipla was discussed as a Harvard Business School case in the Corporate Accountability class this year (I'm a student at the school). It is an interesting ethical debate - do you allow companies to take patented technologies, improve processes, and overpass patents? are patents granted in the US even valid in India? does Cipla hurt or help the drug industry?

It is a long and tough debate, and there is no right answer. However, for those that think Cipla is all about saving the world, remember that it is a for-profit company. Furthermore, keep in mind that drug companies use profits from current drugs to develop future drugs. By reducing their profits now you reduce their ability to develop life saving drugs in the future. The pharma model relies on blockbuster drugs, and ~5000 drug developments start for every blockbuster drug that ends. With those odds, damaging their margins does have a massive effect on their long term ability.

No right answers here... but it is definitely not as simple as Cipla makes it to be.

"It is a long and tough debate, and there is no right answer. However, for those that think Cipla is all about saving the world, remember that it is a for-profit company." Ah yes, the non-profit/for-profit organization fallacy. Boils down to something like: Organizations that don't make profits will only do good. Completely disregarding the fact that a lot/most of its leaders/workers are there working for-profit via a salary, and it's in their best interest to perpetuate their organization. And also there is an incentive to not fix the problem the organization is supposed to solve because that will mean the dissolution of the organization.

Now, don't get me wrong. Some of these organizations do a whole world of good, have very passionate and dedicated individuals that are probably working for free, and there are a lot of causes that benefit greatly from their presence. But let's not fool ourselves into putting non-profit organizations on an almighty moral pedestal where we claim they can do no wrong. While simultaneously demonizing organizations that try to make a profit out of giving people what they want/need.

I do not intend to imply that by being a for-profit company Cipla cannot do any good, nor do I argue the reverse. I do argue that Cipla, as a for-profit, has responsibility to its shareholders first and foremost, and has a goal of making money. It can, and as we saw does, much good in India, Brazil and other developing markets.

Nike's corporate responsibility over the past several years and its investment in new technologies and supplier monitoring is a great example of a for-profit company doing good.

For profit does not mean it needs to maximize profit. For example a steady income may be considered more important than maximizing income. As such a business may try and sell out an event instead of increasing prices closer to what the market will support.

I think it's simple like most such questions. Take the 19th century US position: "IN the 19th century, the United States was both a rapidly industrializing nation and -- as Charles Dickens, among others, knew all too well -- a bold pirate of intellectual property." (http://www.nytimes.com/2002/10/14/business/new-economy-intel...)

(And a little research can show how drug companies take expensive fundamental research from taxpayers, and use marketing costs to inflate their R&D expenditures.)

Truly sovereign nations don't have to respect such inefficient dysfunctional systems which are designed to enrich some sectors at the cost of everyone else. The idea behind intellectual property is that someone with a stick attacks you if you use an idea. No sane developing country would submit themselves to such a regime unless they must. Anyone interested in more can read Ha-Joon Chang's work.

(It should be unnecessary to point out that, regarding the "stick", the US projects violence and starvation throughout the world via military and economic means.)

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