Integrity goes a long way. While people should strive to act with integrity, that’s not always the case, so when they fail at being honest and credible, it is not a huge surprise.
Companies, however, have a stronger obligation to operate with integrity — they are obligated to the company itself, employees and certainly consumers. Recently, two international companies with millions of consumers were exposed for doing some very unethical things.
The Environmental Protection Agency (EPA) released a statement that detailed car manufacturer Volkswagen’s deliberate cheating by creating software that falsely recorded lowered emissions to meet EPA standards during emissions testing. The pollutants would eject the rest of the time, increasing performance. The dangerous aspects of the ejected pollutants included nitrogen oxide and particulate matter, which threaten the health of humans by creating smog and causing respiratory diseases. Both the nitrogen oxide and particulate matter are regulated under the Clean Air Act.
The EPA statement noted, “four-cylinder Volkswagen and Audi diesel cars from model years 2009–2015 include software that circumvents EPA emissions standards for certain air pollutants.”
I was surprised, though I probably shouldn’t have been, that such blatant efforts to circumvent regulations would be approved by engineers and executives. Did they actually believe they would never be caught? Did they really think they had outsmarted the rest of the world?
Apparently so, but thankfully they were wrong, and now Volkswagen will have to pay billions of dollars correcting the device installed in more than 11 million vehicles worldwide. In addition, Volkswagen’s deception has led to a major public relations crisis, so the German company can also plan to spend millions of dollars in ad campaigns in an effort to restore their image. The costs associated with fixing the problem and the immeasurable PR crisis that followed were not worth the deception in the first place. Volkswagen has a responsibility to act with integrity. They failed miserably, and now the company may never fully regain its position in the automotive world.
But Volkswagen hasn’t been the only company to put profit before practicality and integrity.
Turing Pharmaceuticals of New York increased the price of life-saving drug Daraprim by more than 5,000 percent. The percentage increase resulted in the medication going from $13.50 per pill to $750 per pill. Daraprim fights dangerous infections and is often used with AIDS patients and pregnant women.
While the Infectious Disease Society of America and the HIV Medicine Association objected to the significant price increase, Turing Pharmaceutical’s young founder and CEO Martin Shkreli said in an NBC News interview the increase is fair, considering aspects such as “the quality control, the regulatory costs and all of the other things that come with having a drug company. We’ll know in several weeks how profitable the drug is, if it at all … It may turn out that’s it not even profitable at all, even at this price.”
Turing Pharmaceuticals purchased the drug from Impax Laboratories last month for $55 million. Price increases on medications after acquisition are not unheard of, but a 5,000 percent increase is preposterous.
I understand the importance of obtaining a return on one’s investment, but it should be done in a fair, moralistic manner. Jacking up the cost of medication used for people who are literally on their death beds is not fair, nor does it show good moral judgement.
Shkreli is obviously a highly intelligent man. At only 32 years of age, he has excelled in the pharmaceutical industry. However, the Baruch College graduate should have known better and he never should have approved such an outlandish increase.
At Recorder press time, things were looking up. In response to the public outcry and even legislation talk from current lawmakers and presidential candidates, Shkreli said he would lower the cost of Daraprim to a more reasonable rate that offered a minimum ROI.
Hmm … maybe Shkreli is pretty smart after all.
