Common Contracts
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Missions and public purpose: a new social contract between business, labor and the stateSocial Contract • April 26th, 2022
This is the result of decisions made to structure companies by maximizing shareholder value, siphoning off rewards for a small percentage of actors in the economy. Big pharma is a case in point. Even though value is created by many different actors and institutions, with the US government investing over $40 billion a year in health innovation, the prices of drugs do not reflect that public contribution, and from 2007 to 2016, the 19 pharmaceutical companies included in the S&P 500 Index spent US$297 billion repurchasing their own shares – through stock buybacks – equivalent to 61% of their combined R&D expenditures over this same period.3 Now, during a global pandemic, these companies reap the rewards of a system set up to favor high drug pricing, the protection of corporate Intellectual Property (IP) rights and shareholder value over the production of stakeholder value. These problems transcend the pharma industry, with big tech companies now ascribing to the same models of shareholde
