KEY IDEA: Shareholders vs. patients, who is more important? One pharma CEO is leaving no doubt that shareholders come first and has raised prices to appease the Street. Can CEO’s really balance patient needs with shareholder expectations?
The CEO of Valeant pharma said “when “products are sort of mispriced and there’s an opportunity, we will act appropriately in terms of doing what I assume our shareholders would like us to do.” Personally I would not follow that CEO and would leave the company if I worked there.
The real question is how many pharma CEO’s really put investors first and how can employees work in an organization that puts shareholders ahead of patients?
As a realist, I understand that CEO’s have to walk a fine line between investors and customers, but surely putting patients first, as Mr Merck had suggested, is good business. Despite insurance coverage out of pocket costs are still eating a lot of patient income.
The biggest challenges facing healthcare are the costs of obesity, taking care of aging parents and the exploding costs of long term care. Drug costs are still only 10% of every healthcare dollar spent. Drug prices are going to go up but to say it’s because our investors want to maximize their ROI does a disservice to all the hard working people who are trying to help patients live longer and better lives because of Rx drugs.