A Novartis executive explains why the pharmaceutical industry has a 'contract with society'
- Novartis executive Jay Bradner sees his company as having a contract with society.
- "We have a contract with society, and society is our shareholder. A company like ours exists to have definitive impact on life threatening diseases, to keep people alive and healthy for a long, long time, full stop," Bradner, the president of the Novartis Institutes for BioMedical Research, told Business Insider.
- This article is part of Business Insider's ongoing series on Better Capitalism.
The public and the pharmaceutical industry have a complicated relationship.
So in turn, the pressure is on pharmaceutical companies to do right by the people who need the medications they make.
"This is the social contract for a pharmaceutical company and society: to provide definitive medicines for life threatening diseases and then to provide access to those medicines for the fullness of time. And society should rightly hold companies like ours accountable for delivering on both ambitions," Jay Bradner, the president of the Novartis Institutes for BioMedical Research told Business Insider.
Developing new treatments can be a long, expensive process. When new drugs come out, they often have high prices aimed at helping drugmakers make back the money they spent during the development process. After a certain period of time, those drugs start to face generic competition, at which point the drugs become cheaper. Novartis owns a generic drug division, Sandoz, in addition to its branded drug development business.
The reputations of drugmakers have taken a hit over the past few years as the public and politicians have called out the companies for the high prescription drug prices Americans are facing. On Monday, President Donald Trump singled out pharma giant Pfizer for raising the list prices on some of its prescriptions.
Bradner sees society as a shareholder in Novartis, alongside investors and other parties, like its employees and patients, that have a vested interest in the company.
"We have a contract with society, and society is our shareholder. A company like ours exists to have definitive impact on life threatening diseases, to keep people alive and healthy for a long, long time, full stop," Bradner said. "If we stick with that purpose, if we deliver on our promise then I think we can earn the trust of society, which is challenging for the pharmaceutical industry writ-large."
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