Effects Of Philanthropic Activities On Pharmaceutical Industries

By Author: Henry Ford
Total Articles: 189
Comment this article

Philanthropic activities can be described as human activities performed by individuals with the welfare of the public at heart (Adam 2004:113). Generally, these activities include private initiatives aimed at achieving public good and are focused on improving quality of life of individuals in disaster stricken areas. Several philanthropic foundations have been established in the world today with the objective of saving disadvantaged individuals out of their life misfortunes. A good example of a philanthropic foundation is the Bill and Melinda Gates foundation which holds the belief that each and every life has equal value and forms the core of the foundations business. To implement its objectives, Bill and Melinda Gates foundation has recently been involved in eradicating malaria in sub-Saharan Africa by immunizing its entire population (Agard 2010:789).
Philanthropic foundations contrast with the unilateral provisions by governmental and non-governmental organizations in the sense that they are privately organized and are developed out of passion of an individual to improve the quality of life of subjects of a certain ...
... society or a state. The contrast occurs due to the fact that these private foundations do not have a legal obligation to support the people as is the case with the government of such a state, but are triggered to perform their duties by their passions or urge to help the needy (William 2010:114). For example, Bill and Melinda Gates foundation is not tied by the law to enhance healthcare and reduce poverty globally but has conditioned itself to provide their services for the benefit of the public and not with an objective of obtaining material gains from their services (Singh & Harley 2002:59). The foundation spends over US$800 million annually on its budget to fund its not for profit programmes like the children vaccines programme and the University of Washington Department of Global Health and HIV Research (Sarra 2010:108).
Philanthropic activities are generally aimed at balancing the social scientific aspect of the twentieth century with the traditional humanistic core of the ancient world. Traditionally, charitable organizations were established with the same aim of improving the quality of life of people in disaster stricken areas (Peter 2009:88). However, the difference between the traditional charity organizations and modern philanthropic foundations is based on the preparations and quality of service offered by such organizations. Modern philanthropy in healthcare adopts modern scientific procedures as is legally stipulated and as is applied by companies in pharmaceutical industry offering the same services (Liping &Darwin 2010:123). Philanthropic foundations in health care have the responsibility of investigating the problem affecting the target population, making the products or drugs to be used in their mission on industrial basis, training support workers in target locations, supplying the drugs to the trained officials and supervising the project to facilitate the achievement of the objectives of the foundation. It is worth noting that the new model philanthropic foundations do not need governmental support in the achievement of their objectives as was the case with the traditional charity organizations (Kotler 2005:59).
Effects of philanthropic activities on pharmaceutical industries
The fact that philanthropic foundations are getting involved in the provision of healthcare services to societies who greatly demand it has consequently precipitated both economic and general cultural impacts on the pharmaceutical industries (King 2010:276). The basic objective of any business venture is to make the greatest possible profits and thus, new entrants in the industry always challenge the realization of the above objective. Thus, more worse would be the impact of non-profit organizations’ free provision of similar products to the target customers of the pharmaceutical industry. However, the general objective of the pharmaceutical industry to raise the health standards of global population can not be underestimated (Kanwar 2003:126). Therefore, it can be argued that philanthropic activities in the provision of health care services pose both positive and negative impacts to the pharmaceutical industries of the world. In addition, the impacts of such foundations to the industry may be categorized in to long term and short term effects. It s worth noting that such effects are not only hindrances to the realization of pharmaceutical industries’ objectives but also build strong foundation for the industry in diverse locations of the world (John 2005:342).
Among the effects of the involvement of philanthropic foundations in the provision of health care services is that their actions violate patent rights of the pharmaceutical companies (John 2002:11). According to the law, patent rights should be reserved to the original inventor of a product and manufacturing of such products can only be done under the authority of the patent right holder. Therefore, the law provides that only pharmaceutical industries which invented certain drugs have the right to industrially produce such drugs (Jean 2005:13). However, in their mission to manufacture a great quantity of such drugs for the great targeted population, philanthropic foundations industrially produce the drugs though they are not the original inventors of such products. Therefore, pharmaceutical industries are negatively affected by the activities of philanthropic foundations in the sense that the foundations violate the patent rights of the industry (James 2007:214).
Pricing structures of the pharmaceutical industries are also affected by the activities of philanthropic foundations in the provision of health care services (Jan & Roland 2006:203). The situation on the ground is that, the foundations are giving certain drugs to their target population freely as compared to the pharmaceutical industries which is supplying the same drugs to the same population at a cost (Hove 2007:543). Economically, the situation would automatically force the pharmaceutical industry to reduce the prices set for their products to enable them at least get a share in the market. This greatly affects the industry in the sense that it is limited from achieving its estimated profit margins and thus hindering its ability to finance its projects (Hetherington 1998:24).
Ethos of pharmaceutical industries indicate that the industry has the mandate to ensure that claims made in medical publications are fully supported by authentic data and should also limit publications of unjustified medical claims (Hetherington 2000:225). However, the pharmaceutical industry does not have control over medical publications and reports made by philanthropic foundations on medical claims and arguments. Therefore, involvement of philanthropic organizations in the provision of healthcare services limits the ability of pharmaceutical industries to censor medical publications and hence the industries are risking that the public and the government would have an unjustified image of health situation of the society (Helaine 2008:342). In addition, philanthropic foundations limit the ability of pharmaceutical industries to access valuable markets for their products thus limiting their sales and hence bringing down the profits gained by companies in the industry (Giuliana 2007:765).

The author is associated with

The author is senior writer at https://www.allacademicanswers.com