In a bid to transform corporate America, a new nonprofit created by a Wall Street hedge fund manager has ranked nearly 1,000 publicly traded companies to determine the extent to which they pursue “just” policies and practices. And leading the pack among drug makers is Amgen (AMGN).
The goal is to maintain an information clearinghouse that can be used to spur companies to make improvements while, at the same time, giving the public tools to make more informed decisions about purchasing, investing, and employment.
“We’re trying to address a simple question: How do we make a capitalist society and system work better for everybody?” said Rob Brown, the head of research at the new nonprofit, which is called JUST Capital. The organization is the brainchild of Paul Tudor Jones, who founded a $10 billion hedge fund called Tudor Investment. “The mission is to address inequalities, because we recognize there are certain imbalances that can’t exist forever.”
To offer a solution, JUST Capital surveyed some 40,000 Americans to gauge their views on “just” behavior by corporations. From there, the team identified 36 factors that were, in turn, boiled down to nine categories, which were then assigned metrics in order to develop the rankings.
Those categories include: fair pay; the quality of employment benefits; workplace treatment; product attributes; customer satisfaction; leadership and ethics; supply chain standards; and environmental performance. To ensure information was up to date, the nonprofit combed through publicly available company data, third-party vendor data, government data, and crowd-sourced data, among other things.
The end result was a list of the 100 “just” companies alongside separate rankings for each industry sector. However, only the rankings for the better-performing companies will be disclosed, Brown explained. All other companies in each sector will simply be listed because Jones did not want to single companies out for bad behavior.
“We’re not in the shame game,” Jones told Bloomberg News recently. “This is a competition for goodness. The concepts of justness also equate with corporate performance, which equates with earnings, which equates with share prices, which equates with our performance.” Indeed, Jones plans to start an exchange-traded fund based on “just” companies identified in the rankings.
So how “just” is the pharmaceutical industry?
Of the nearly two dozen publicly traded US drug makers, the biggest names largely dominate the rankings, although some smaller companies also ranked highly. After Amgen, the top 10 is rounded out by Biogen (BIIB), Johnson & Johnson, Agilent Technologies, Eli Lilly, Bristol-Myers Squibb, Quintiles, United Therapeutics (UTHR), BioMarin Pharmaceutical (BMRN), and AbbVie (ABBV).
The lowest ranking was awarded to Zoetis (ZTS), which sells animal health products. The other companies near the bottom of the list included Neurocrine Biosciences (NBIX), Vertex (VRTX) Pharmaceuticals, Mylan Pharmaceuticals, and Pfizer (PFE).
In general, drug makers were found to have better workplaces, offer good health care benefits and retirement plans, and have good disclosures on political spending, according to JUST Capital. But they also have more negative customer incidents, mixed product quality scores, and mixed scores on the environment.
However, we should note that JUST Capital did not compare industry against industry. Moreover, the factors used to develop the rankings did not include prescription drug prices, which is an ongoing topic of national concern, although Brown noted this will likely be considered in future rankings.
But the rankings did incorporate fines and violations racked up by drug makers. And there have been many of those in recent years in which companies reached settlements for illegal marketing, paying kickbacks to doctors, and offering bribes to officials and health care providers in foreign countries.