Abstract

Novo Nordisk, the Danish pharmaceutical company, is a leader in the global insulin market. Considered a champion of sustainability, the company sold some of its insulin products at a subsidized price in some of the poorest countries in the world. In the year 2010, it temporarily stopped the sale of its drugs in Greece when the government asked for a 25 percent reduction in the prices of all the medicines sold. The withdrawal affected nearly 50,000 people who were using its products there. Patients, the Greece government, and NGOs accused Novo Nordisk of putting profits before its responsibility toward society. The challenge before the senior management at Novo Nordisk was to strike the right balance between business and global health. This case is a critical one as it raises a contemporary issue facing healthcare companies – the compassion vs competitiveness dilemma. The mere thought of patients being denied access to life-saving medicines by pharmaceutical companies – either because the patients could not afford their medicines or because the companies refuse to cater to a market as the government there is demanding price cuts – makes us very uncomfortable and fills us with outrage. We don’t like the power the market vests on pharmaceutical companies which allows them to, at times, give precedence to competitiveness over compassion, but it’s the power of the market that creates the therapies in the first place. The tension – between access to drugs and incentives for drug discovery – sits at the heart of the case. The case further raises the question whether firms with unique competencies have special obligations, and help explore ways in which such companies can strike the right balance between compassion and competitiveness.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand a key contemporary issue facing healthcare companies – the compassion vs competitiveness dilemma.
• Understand the main issues related to corporate social responsibility and sustainability and the various challenges faced by organizations regarding the impact of their operations on the society.
• Appreciate the importance of integrating sustainable development practices of a firm with its business strategy.
• Explore ways in which Novo Nordisk can strike the right balance between its business and global health.

Keywords

Corporate Social Responsibility, Stakeholder tension, Corporate Sustainability, Business-government-society relationship, Systems Approach, Stakeholder theory, Managing stakeholder tension, Managing stakeholders, Striking the right balance between business and global health, Striking the right balance between compassion and competitiveness, Business Ethics, Triple bottomline, Shared value, Special obligations, Unique rescue competency