Benefit Corporations in Pharmaceutical Product Development
V1.0 researched and written by Surabhi Agarwal, reviewed by Adrián Alonso Ruiz, Marcela Vieira, and Suerie Moon, copyedited by Adrián Alonso Ruiz. Last updated March 2022.
This research synthesis provides an understanding of the Benefit Corporation (BC) legal form, reviews the existing debate on its various aspects and explores the potential of the BC form for the pharmaceutical industry. Currently, the literature on BCs in the pharmaceutical sector is thin*. This synthesis attempts to fill this knowledge gap by reviewing the literature on BCs and the evidence on their performance.
Traditional for-profit corporations are often criticized for only pursuing financial returns, prioritizing shareholder interest while overlooking their social responsibility (Hiller 2013). Some countries have attempted to address this by creating new legal categories, with many different corporate forms emerging in the last few years, especially in the United States (Rawhouser, Cummings, and Crane 2015). These new legal entities attempt to look beyond the traditional roles of for-profit and non-profit companies and aim to combine aspects of both. In this way, they theoretically allow balancing economic goals with social and environmental ones. Benefit Corporations (BCs) is one such legal form.
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The benefit corporation legislation was first introduced in the United States in 2010 and since then other countries like Colombia, Ecuador, France and Italy have also passed similar laws (Benefit Corporation 2021). These legislations have come up at a time when there are increasing attempts at re-orienting the profit-maximization and shareholder primacy goals of for-profit corporations, to instead allow for broader societal and environmental benefits (Hiller 2013).
Some researchers have highlighted the BC legislation’s particular relevance for the pharmaceutical industry. As large multinational corporations dominate the pharmaceutical market, public needs become secondary to the goals of generating revenues and return on investments, leading to a disconnect between health needs and the incentives for such corporations (Mazzucato and Li 2021; Tulum and Lazonick 2018). Since BCs attempt a departure from this, they could prove to be a suitable alternative business model that can lead to better health outcomes (Heled, Vertinsky, and Brewer 2019). However, currently only a few companies in the biosciences sector are organized as a BC and their potential in the pharmaceutical industry remains to be fully explored.
This research synthesis is based on a review of the studies published on benefit corporations, along with some grey literature on the topic. Search terms used include ‘benefit corporations’ and ‘pharmaceuticals’. Text was searched on Google Scholar and PubMed. Search was conducted in English.
Summary of the contents
This research synthesis is organized into the following topics:
Synthesis of the literature
Traditionally organizations can register themselves as for profit and non-profits, which mark clear distinctions between how the two function (Resor 2012). Non-profit organizations are designed to pursue a charitable purpose and do not have shareholders. They also cannot engage in profitable activities like raising private capital or distributing dividends (Heled, Vertinsky, and Brewer 2019). On the other hand, for-profit corporations are driven by two main principles - profit maximization and ‘shareholder primacy’ (Hiller 2013). This means that generally the directors of a for-profit company would put the interests of shareholders first and undertake decisions that produce maximum financial returns for them. Therefore, these two corporate forms are considered inadequate for companies looking to go beyond the economic vs social dichotomy (Resor 2012).
For-profits have limited avenues to pursue social missions as part of their corporate purpose (Pelatan and Randazzo 2016). There are some provisions in corporate law, such as ‘constituency statutes’ in the US, under which directors of for-profits have certain flexibility in decision-making so that they can consider interests of other stakeholders besides the shareholders and can pursue other goals in addition to generating profits (Hiller 2013). However, there are different definitions of who is considered a stakeholder and scholars have found that the statutes have made no significant impact since they were first adopted in 1983 (Hemphill and Cullari 2014). Corporations also do not have the legal means to protect their social missions in the event of their sale or takeover. Examples of this include the popular case of Ben & Jerry’s who felt they had to sell to the highest bidder rather than someone who would ‘preserve their commitment to socially responsible practices’ (Hiller 2013). From a stakeholder perspective, for-profit corporations are not required to adhere to any accountability and transparency mechanisms for their social responsibilities. This leaves stakeholders and customers with limited means to verify whether the corporations follow responsible practices or check the extent to which they do so (Hiller 2013). In such cases, legal form can become an obstacle for both companies and stakeholders.
New legal forms have been introduced by different countries to accommodate organizations trying to combine economic and social goals, creating ‘hybrid’ forms that have properties of both for-profit and nonprofit corporations (Rawhouser, Cummings, and Crane 2015).
There have been many such legal forms in Europe and the US which Esposito refers to as ‘the social enterprise revolution’ (Esposito 2012). In Europe, ‘social cooperatives’ have gained widespread recognition and support. But the legislation has a narrow scope and most countries have only implemented different versions of a work integration program called Work Integration Social Enterprise (WISE). They have also achieved limited success. In the UK, the creation of Community Interest Companies (CIC) came in response to the need of a new legal entity for socially responsible companies and has a much broader scope than Europe’s social cooperatives. CICs include additional restrictions as compared to traditional for-profits to ensure that they serve the community interest, such as guidelines on profit and asset distribution and regulatory mechanisms. CICs have grown in traditionally charitable areas and in the private sector (Esposito 2012).
In the United States, there has been an increase in the available hybrid forms and their general recognition. Some of the legal options include Low profit Limited Liability Corporations (L3Cs), Flexible Purpose Corporations (FPCs), Social Purpose Corporations (SPCs) and Benefit Corporations (BCs). FPCs, SPCs and BCs are all for-profit corporate forms that have a dual purpose of generating profits and social and/or environmental benefit. After being introduced in 2011, FPCs were later renamed to SPCs, and the two forms only have minor differences (Chiodini 2014). The FPC/SPC form is essentially a version of BCs. They differ from the BCs by forgoing some provisions in considering stakeholder interests (Heled, Vertinsky, and Brewer 2019), reporting requirements and liability conditions (Esposito 2012). L3Cs are different from these other forms, as they serve a special purpose of making it easier and safer for charitable for-profit corporations to receive Program Related Investments (PRIs), a way for ‘grant-making foundations to make tax-free jeopardy investments in socially beneficial businesses rather than traditional grants to charities’ (Esposito 2012; Resor 2012).
As evident, there are several existing hybrid corporate forms. However, in this paper, we focus on BCs in particular. Among the reviewed hybrid forms, BCs demonstrate the clearest legal obligation for balancing economic goals with social and environmental ones and have also received somewhat greater acceptance among corporations. The following section looks more closely at the BC form and how it is governed.
2. Benefit Corporations
Benefit Corporation is a legal form available to for-profit corporations where in addition to generating profits, companies are required to pursue a general public benefit defined as a ‘material positive impact on society and on the environment, taken as a whole’ (Pelatan and Randazzo 2016). Additionally, BCs can choose to pursue a specific public benefit such as improving human health, serving low-income communities or ‘any other particular benefit on society or the environment’(Benefit Corporation 2021). BC directors are required to consider broader stakeholder interests and the legislation provides them greater protection ‘in their pursuit of a social mission’ (Pelatan and Randazzo 2016). Furthermore, BCs are required to produce annual reports that show the progress made on their social or environmental goals. Therefore, the legally binding requirement ‘to produce a “general public benefit” is the hallmark of the benefit corporation’ (Heled, Vertinsky, and Brewer 2019).
The BC legislation in the US is based on the ‘Model Benefit Corporation Legislation’ developed by BLabs, a non-profit promoting socially conscious business practices (Benefit Corporation 2021) (See Box 1). Different states have adopted their own versions of the model legislation and can differ in specific requirements, but the essence of the legislation remains the same. This form provides corporations with the means to protect their mission ‘through capital raises and leadership changes’ and can focus on their mission even after a public offering. As BCs do not have to sell only on the basis of the highest financial offer, they have greater flexibility in sale and liquidity, (Benefit Corporation 2021). However, BCs do not enjoy any additional tax incentives or regulatory benefits.
Barnes et al. provide a legal guide to incorporating as a BC. New companies can incorporate as a BC in the states where the legislation is passed. Existing for-profit corporations can choose to become a BC by passing amendments to their articles of incorporation which must be approved by a two-thirds majority vote of shareholders.
Other aspects of BCs and how they differ from traditional for-profit corporations are outlined below:
Purpose - in addition to profit-making, BCs are required to pursue general public benefits and may or may not pursue a specific public benefit as stated above. The Model legislation outlines six specific benefits, but BCs are free to state their own as well. BCs can also choose to state a specific benefit even if not mandated by law.
Responsibility - directors of BCs are no longer only accountable to their shareholders but have an ‘expanded responsibility’ to include interests of other stakeholders in the decision making (Pelatan and Randazzo 2016). Stakeholders can include employees, subsidiaries, suppliers, customers, the local community or any other appropriate interest groups. Decision-making should also account for societal and environmental impact, along with the impact on the BC’s stated public benefit(s). As such, directors are required to include non-economic grounds in their decisions. They are also given protection from any liability from such decisions, which is unavailable to directors of traditional for-profit corporations.
Transparency - BCs are also required to produce an annual benefit report which states the progress made in terms of how and to what extent general public benefit was pursued (Pelatan and Randazzo 2016). In most states, BCs are required to make these reports publicly and freely available and sent to all shareholders. The performance can be assessed against an independent third-party standard or by the directors themselves (Heled, Vertinsky, and Brewer 2019).
Enforcement - Benefit Enforcement Proceedings (BEP) can be initiated against the BC directors if they are seen to be failing in their pursuit of the stated public benefits. Such legal action can, however, only be initiated by those holding more than 5% shares in the corporation or ones that are expressly stated in the articles of incorporation.
Benefit corporation legislation internationally
First introduced in the state of Maryland in the US, the legislation is currently recognized in 38 states (Benefit Corporation 2021). In 2016, Italy adopted a legislation called Società Benefit, which is based on the benefit corporation law in the US (Pelatan and Randazzo 2016). Similar laws have come into effect in a few other countries as well - Colombia, Ecuador and France (Benefit Corporation 2021). Australia also considered a similar bill, but it failed to pass (Ramsay and Upadhyaya 2021). The European Commission has been considering a sustainable corporate governance directive since 2020, that ‘aims to improve the EU regulatory framework on company law and corporate governance’.
The basic form of the legislation in these different countries or the different states in the US is similar and makes provisions for promoting public benefit as part of corporate mandate. However, they can differ in their specific requirements and implementation methods. For example, the Società Benefit in Italy requires a more detailed annual report than the Benefit Corporations in the US (Pelatan and Randazzo 2016). Similarly, the new corporate form in France, Société à mission, includes ‘greater accountability’ in defining the mission as it is evaluated by a special board instead of the company’s board of directors (Segrestin, Levillain, and Hatchuel 2018).
Box 1. Benefit Corporations and BCorps - an important distinction
Often confused and sometimes used interchangeably, Benefit Corporations and BCorps are two different ways of identifying organizations that aim to use their business for good, and one is not an acronym for the other. While a benefit corporation is a legislation and signifies a particular type of legal entity, BCorp is a certification based on an impact assessment that any type of organization can apply for. Therefore, there are only limited countries or states that recognize benefit corporations, but organizations worldwide can receive the BCorp certification. The ambiguity also stems from the role of BLabs, a non-profit organization that promotes both the legislation and the certification. However, while BLabs are the sole organization evaluating and issuing the BCorp Certification, it can only advocate for a benefit corporation legislation in any country. These are the most crucial differences in their basic form, while other differences also exist such as accountability and transparency measures. The full list of distinctions can be found on the Benefit Corporations website.
Benefit Corporations and its relevance for the pharmaceutical industry
Given this background of BCs and their legal requirement to balance profits and public benefits, some authors have highlighted the role BCs can play in correcting the shortcomings of the pharmaceutical industry. The healthcare market in general shows a disconnect between the private incentives to pharmaceutical companies and public health needs, leading to poor health outcomes even in large economies like the US (Heled, Vertinsky, and Brewer 2019). At the same time, the pharmaceutical industry has garnered large economic returns, making it one of the most profitable sectors (Frood 2017).
Heled, Vertinsky and Brewer (2019) point to this disconnect in the ways drug development is prioritized and the lack of transparency in the development process and drug pricing. They argue that while the imperfections of the healthcare market are not unknown, the proposed solutions are all targeted market corrections rather than the actors, i.e., the innovators themselves. With respect to the pharmaceutical industry, the authors suggest that for a substantial market reform, the corporate form under which these companies operate should be targeted as the development of the majority of lifesaving drugs currently remains in the hands of profit and shareholder driven for-profit companies (Heled, Vertinsky, and Brewer 2019). Since hybrid corporate forms such as BCs are mandated to make decisions in the interest of a larger stakeholder group, they could potentially bring patient needs to the center of drug development instead of economic returns. This could also help to keep the often unjustifiable high drug prices in check, making them more affordable and accessible to the general public. Lastly, as drug development involves high upfront costs, BCs can still raise private capital from like-minded investors who support their social mission (Frood 2017). Therefore, under a strong regulatory ecosystem, BCs could be useful in reorienting the industry towards public health needs.
During this research, it was evident that the BC model remains largely untested in the pharmaceutical sector with only a handful of such companies, along with some in diagnostics and alternative therapies. Therefore, to assess the potential of BCs as a feasible alternative business model for pharmaceuticals, this paper reviews the general literature on BCs, regardless of industry type. While evidence on BCs’ performance is limited, it proves a useful supplement to the largely theoretical discussion of the legislation’s merit and demerits.
3. Debate and evidence on Benefit Corporations
Literature on BCs shows an ongoing debate on the need and effectiveness of this new corporate form, but empirical data is limited. Some of the debate has centered around the two key components of BCs, analyzing whether the legislation is actually able to overcome the ‘profit maximization’ and ‘shareholder primacy’ challenges of for-profit corporations. Other areas include reporting requirements and transparency, definition of mission statements and BCs’ ability to attract investments compared to traditional corporations.
Challenging profit maximization
On profit maximization, some arguments have focused on whether a new legal form was needed at all, and if the existing provisions in corporate law were sufficient to meet the goals of balancing profits and societal good, such as the ‘constituency statutes’ reviewed earlier. While some argue that the constituency statutes already provided for-profits a legal route to follow socially-oriented decision-making, others have shown that BCs go well beyond the provisions allowed in those statutes. For instance, BCs makes it legally binding for directors to consider stakeholder interests rather than merely allowing them to do so. Moreover, while the statutes have not been adopted broadly and companies maintain a formal for-profit status, BCs on the other hand give them a more distinct and explicit identity and help in differentiating themselves from others (Hemphill and Cullari 2014). At the same time, BC legislation has also been criticized sometimes for creating a discourse of good vs bad corporates, stating that for-profit companies may feel compelled to convert to BCs because of an unjustified pressure (Hemphill and Cullari 2014). However, the research did not find evidence to substantiate this.
Lastly, concerns have also been raised against the effectiveness of BCs to look beyond profit maximization as some corporations may use the BC status for marketing purposes similar to ‘greenwashing’ (Dorff, Hicks, and Davidoff Solomon 2020; Stecker 2016; Wilburn and Wilburn 2014). These are mainly based on the provisions for accountability and regulation of BCs. Those arguing in favor of BCs suggest that there are enough accountability and transparency safeguards in the law against this (Stecker 2016).
Challenging shareholder primacy
The criticism of the BC legislation on the shareholder primacy aspect points out that in its current form, it is no different than traditional for-profit corporations (Fisch and Solomon 2021; Kurland 2017; Munch 2012; White 2014). Even though considering other stakeholder interests is one of the key aspects of the BC form, some argue that the law does not provide any additional rights to stakeholders whilst continuing with the same level of authority for shareholders. This in particular is highlighted in the context of shareholder duties, such as electing board members and enacting structural change. Most importantly, the right to initiate any legal action remains with the shareholders. Moreover, just as shareholder majority is needed to convert a for-profit into a BC, they also hold the right to convert a BC back into a traditional for-profit corporation. Therefore, public benefit will only be prioritized as long as shareholders are willing (Fisch and Solomon 2021).
Loose definitions and reporting challenges
Studies have also focused on the aspect of ‘public benefit’ and emphasized that the definitions are too vague and broad (André 2012; Fisch and Solomon 2021; Mion 2020). Therefore, even the stated general or specific public benefit of BCs are too vague and often not easily quantifiable. Empirical studies conducting qualitative analysis of mission statements of BCs provide evidence to substantiate this. Studies of Italian BCs registered under Società Benefit, find that the BCs lack a clear understanding of what public benefit means and therefore, themselves interpret the definition of ‘public benefit’ in a heterogeneous manner. This leads to a broad range of mission statements that cover both internal aspects such as promoting individual skills as well as statements more generally oriented to societal and environmental good (Mion and Loza Adaui 2020; Mion, Loza Adaui, and Bonfanti 2021). Moreover, the lack of standard and concrete definitions has led to ‘soft value statements’ such as inspire change and bring joy to customers, which are difficult to operationalize and can be easily deprioritized in favor of shareholder interests. This could especially be a concern for publicly traded BCs (Fisch and Solomon 2021). Highlighting these broad benefit statements, (Fisch and Solomon 2021) argue that stated purposes should be made more concrete and measurable coupled with stronger accountability measures.
Many researchers have also looked into the reporting requirements of BCs. As discussed in the previous section, BCs are required to produce an annual benefit report that entails certain provisions on the content and public availability as well. However, at least in the US variation in reporting requirements and the specificity of the law may dilute its effectiveness (Hiller 2013; Murray 2015). Discussion on the reporting requirements broadly covers the following aspects:
Third-party assessment - Assessment against independent third-party standards is not a requirement in all BC legislations. Some authors also point to the heterogeneity of standards, suggesting that BC directors may choose the ones that are convenient for them. Therefore, transparency issues may arise due to self-reporting (where third-party standards are not required) or in the way standards are selected (Munch 2012).
Metrics - The legislation is also criticized for not being specific enough in the reporting requirements. Most reporting guidelines are largely descriptive, do not necessitate quantifiable measures (including financial or impact variables), or state any standardized metrics like those in financial reports (Esposito 2012; Murray 2015; Weismann 2017; White 2014). This makes evaluating a BC’s performance more challenging. As a result, many benefit reports are of poor quality, and vary in both content and methodology (Mion 2020; Murray 2015). (Weismann 2017)) finds that the actual value of the surveyed BCs is not so much as a measurable social impact but rather through increased brand presence.
Compliance - Due to a lack of accountability processes in most cases, it becomes challenging to evaluate whether BCs are producing and publishing their annual benefit reports as legally required, ensure reporting quality or impose penalties for misleading information (Munch 2012). At the same time, it is argued that such mechanisms would only add further costs which most small BCs would unlikely be able to bear (Esposito 2012). However, empirical studies on the compliance rate of benefit reports have found it to be extremely low, 10% in the US (Murray 2015) and just about 33% in Italy (Mion 2020). This in turn is again explained by the potential cost involved in undertaking a third-party assessment.
Attracting private investments
Studies on the ability of BCs to attract investment are even more limited. (Cooper and Weber 2021) assess the perception of investors and MBA students to see how the BC status might affect their investment decisions and find generally positive results. Overall, BCs seem to be just as likely or more likely to receive investment if the financial outputs are the same as that of traditional for-profit corporations. About one-third of the investors and students said they would prefer BCs over for-profits even if it meant lower return on investments, given that BCs are expected to be more committed to their social responsibility (Cooper and Weber 2021). In an empirical study of investments into BCs in the US state of Delaware, Dorff et al. (2020) find that BCs received smaller investments at the same stages compared to for-profit corporations. However, both for-profit and BCs received funding from similar, traditional venture capital sources, suggesting that the BC form is accepted to some extent from the investor community (Dorff, Hicks, and Davidoff Solomon 2020). In other isolated examples, companies like Patagonia and Warby have not faced investor related issues since they organized as a BC (Surowiecki 2014). However, as mentioned, studies with such evidence are limited and those focused specifically on benefit corporations in the pharmaceutical industry are even more limited.
Evidence on Pharmaceutical Benefit Corporations
The evidence on pharmaceutical BCs is rather scarce. In general, the few authors exploring the topic have written positively on its potential to lead to better health outcomes and improve accessibility and affordability. Empirical studies are, however, scarce. Eiser (2016) explores the issue of high drug prices arguing that the need to generate profits should not mean that drugs can be priced ‘beyond reasonable limits’ making them inaccessible for most people. The pharmaceutical industry thus needs a model that can retain private capital but reorient the industry to be driven by a public mission, and the BC legislation provides an opportunity to bring ethical considerations into its fold. Davidson (2019) emphasizes that BCs are especially well placed to address markets that are otherwise ignored by the giants in the pharmaceutical industry and through such focused drug development, they could help fill the existing research and development gaps. Frood (2017) explores the issue of investment for BC pharmaceuticals. As drug development requires huge upfront costs, attracting investment is crucial for pharmaceuticals. However, investors mainly interested in financial returns might refrain from investing in BC pharmaceutical companies as they prioritize ‘benefits over profits’ (Frood 2017). The BC status can then instead help in attracting like-minded investors and some of the existing BCs have been successful in doing so. Examples include Beta Bionics, who after initial hurdles was able to raise USD 10 million from Eli Lilly and Novo Nordisk. The company feels that their BC status was one of the reasons they received the investment (Frood 2017). On the other hand, Trek Therapeutics faced financial difficulties in sustaining investment leading to a closure of its operations in 2019 (Smith and Litzky 2019).
The BC form has also been considered in the context of antibiotic development, gene therapy and vaccines. Outterson and Rex (2020) review three corporate structures, for-profit, non-profit and BCs, and argue that BCs are best suited for incentivizing antibiotic R&D. Unlike for-profits, BCs are designed to function with comparatively lower-profit margins, which is something that smaller antibiotic R&D companies have struggled with in the past. Additionally, they incorporate a public benefit purpose which ensures their commitment to the social mission. Moreover, they can still access private capital that is unavailable to non-profits and is most likely to come from impact investors and charitable foundations (Outterson and Rex 2020).
BCs could also potentially be influential in limiting the high prices of gene therapies. As more gene therapy products enter development pipelines and the commercial markets, a lack of affordable pricing mechanisms can make lifesaving therapies inaccessible for those who need it the most. Therefore, BCs can help promote ‘a meaningful change’ where gene therapy companies do not consider return on investment for shareholders as their main goal (Fischer, Dewatripont, and Goldman 2019). Bateman (2019) explores this in regard to access to vaccines in developing countries and suggests that if vaccine developers convert to BCs, they can commit to better access in developing countries. Having committed to a social purpose, BC vaccine developers can engage in licensing agreements and partnerships with manufacturers in developing countries that help overcome IP barriers (Bateman 2019). However, the lack of tax or other government incentives also need to be addressed. For example, governments can incentivize more pharmaceutical companies to incorporate as a BC by favoring those with BC status for federal funding and partnerships (Eiser 2016).
Along with the public health benefits, the BC form also poses advantages for pharmaceuticals themselves, and many companies suggest the same. Given the especially poor public reputation of pharmaceuticals, BC status offers avenues to regain customer trust by showing that they are patient-centric and are actively pursuing social goals (Kessel 2014). Moreover, it allows companies that want to focus on patient-centric values or social benefit to protect their mission against the dominance of stockholder interests (Nawrat 2021). Some feel that the BC form helps them attract investors and build stronger partnerships with others who align with the mission, as well as retain talent. The CEO of Aldatu Biosciences has argued that it is better if certain investors are uninterested from the onset as it means they do not have to convince them later of the company’s commitment to their social mission (Frood 2017). According to Chiesi Group, one of the first pharmaceutical companies in Italy to adopt the Società Benefit form, the benefit corporation is also a way of evaluating all companies across the same standards, and hence ‘promotes healthy competition’.
The BC legislation offers corporations the opportunity to publicly state their social and environmental missions and brand themselves as such. They are also given safeguards from shareholders to consider the interests of other stakeholders. However, many argue that BCs do not overcome the profit maximization and shareholder primacy principles of for-profit corporations and offer limited alternatives for stakeholder participation in the governance of companies.
Given the limited data on BCs performance, more evidence is needed to evaluate whether BCs have been successful in meeting their core goals of balancing public benefits with profits. The literature also highlights many issues in the legislation as it exists today including a need for more specific guidelines, and enforcement and regulatory mechanisms that can ensure that companies are following their missions. The select studies of poor compliance with benefit reporting show that ultimately the success of the BC form may depend on the motivations of individual corporations.
Literature on BC pharmaceuticals, and in the healthcare sector more generally, shows that there is a general alignment between the BC model and the potential for a more patient driven industry. However, when reviewed in light of the overall BC literature the capacity to bring change to the established industry may be limited. In the absence of enough evidence, it remains unclear how successful the BC model can be in producing better health outcomes for patients. Nonetheless, the cases of existing BC pharmaceuticals show that it is an interesting corporate form for mission-driven pharmaceuticals.
5. Examples of Benefit Corporations in the pharmaceutical industry
There is no comprehensive database of companies listed as BCs in the US or other countries. The Benefit Corporations website (https://benefitcorp.net/businesses/find-a-benefit-corp?sort_by=title&sort_order=ASC) attempts to document the BCs in the US. However, this list cannot be searched specifically for pharmaceuticals. Some of the pharmaceutical initiatives identified in the course of this research are discussed below -
Aldatu Biosciences - A diagnostics company registered as a PBC in the US, their stated goal is to ‘advance infectious disease diagnostics that facilitate society's collective response to global health emergencies’. Their PANDAA™ platform can be useful for low-cost and easy-to-use diagnostics and is also used for diagnosing SARS-CoV-2, Lassa fever, and drug-resistant HIV variants. They converted into a PBC in 2015, one year after the company was founded and want to attract like-minded investors. They have been successful in getting investment from mission-driven organizations, which includes Harvard’s Office of Technology Development (Frood 2017).
Audacity Therapeutics - Registered in California, US, the pharmaceutical company follows the principles of being complementary, transparent and integrating patients in their research and development process. They prioritize drug projects with great therapeutic potential instead of its profit potential. The company is still in early stages of drug development but is currently developing a therapy for multiple sclerosis (MS).
Beta Bionics - A US based MedTech company, Beta Bionics is one of the first MedTech companies to register as a benefit corporation. They are committed to improving insulin delivery and are currently working on a fully automated delivery device. Their product, iLet® bionic pancreas, is currently under clinical trial.
Chiesi group - Italian pharmaceutical company, Chiesi group, has more than 80 years of experience in drug development and has ‘built a strategic plan fully dedicated to sustainability’ (Chiesi 2021). The organization changed its legal status to a benefit corporation after the law was adopted in Italy and is also the largest pharmaceutical company to receive the BCorp certification. Their last reported turnover is over EUR1 billion.
MAPS PBC - Multidisciplinary Association for Psychedelic Studies (MAPS) is a non-profit research and educational organization working on the careful uses of psychedelics and marijuana. Its spin-off MAPS PBC, was started in 2014, so that their MDMA-assisted therapy could be made accessible (Nawrat 2021).
Perlara PBC - Perlara is the first biotech company registered as a PBC in 2014. Their approach is to involve patients and their families in the process of finding cures for rare diseases. Since 2014, they have started different initiatives under their name such as ‘PerlArk Drug Discovery Platform’ or through partnerships such as Maggie’s Pearl, a joint venture between Perlara and Maggie’s Cure (which they call Perlara 2). Their website provides limited information on their current activities or details of the Perlara PBC.
Phlow - Phlow is a US based manufacturing firm that provides end-to-end solutions for essential medicines by using continuous flow technology and green chemistry. Their manufacturing offers an alternative to the traditional batch manufacturing. They have also raised USD 354 million from the US government in manufacturing funding and have partnerships with CivicaRx (Nawrat 2021).
Trek Therapeutics - a US-based pharmaceutical company, committed to ‘affordable and accessible medicines for the entire world’, especially for infectious diseases. Their initial goal was to launch a treatment for Hepatitis C in 2020. The company had raised over USD 8 million and was reportedly looking for further investment. However, according to (Smith and Litzky 2019), they had to close operations due to financial difficulties.
Research Gaps and Limitations
The research synthesis presented here has certain limitations. The text reviewed is only in English and mainly concerns BC legislation in the US. It does not explore how similar legislations in other countries have evolved. Most of the available literature is based on a theoretical discussion only. Empirical evidence related to benefit corporations is limited especially on their performance, benefit creation and level of investment received. As mentioned earlier, only a few authors have explored benefit corporations in the pharmaceutical context and none of them are empirical studies. For the select BC pharmaceuticals found during this research, the impact of the BC status on their growth and ability to attract investments is unknown.
 Find a Benefit Corp, https://benefitcorp.net/businesses/find-a-benefit-corp?sort_by=title&sort_order=ASC
 Aldatu Biosciences, https://www.aldatubio.com/
 Audacity Therapeutics, https://audacitytherapeutics.com/
 Beta Bionics, https://www.betabionics.com/
 Chiei Group, https://www.chiesi.com/en/about-us/b-corp-and-benefit-corporation/
 MAPS Public Benefit Corporation, https://mapspublicbenefit.com/
 About, Multidisciplinary Association for Psychedelic Studies (MAPS), https://maps.org/about
 About, Perlara, https://www.perlara.com/about
 What We Do, Phlow, https://www.phlow-usa.com/what-we-do/
 Trek Therapeutics, https://www.trektx.com/
* For the purposes of this review, we have established three categories to describe the state of the literature: thin, considerable, and rich.
- Thin: There are relatively few papers and/or there are not many recent papers and/or there are clear gaps
- Considerable: There are several papers and/or there are a handful of recent papers and/or there are some clear gaps
- Rich: There is a wealth of papers on the topic and/or papers continue to be published that address this issue area and/or there are less obvious gaps
Scope: While many of these issues can touch a variety of sectors, this review focuses on medicines. The term medicines is used to cover the category of health technologies, including drugs, biologics (including vaccines), and diagnostic devices.
Disclaimer: The research syntheses aim to provide a concise, comprehensive overview of the current state of research on a specific topic. They seek to cover the main studies in the academic and grey literature, but are not systematic reviews capturing all published studies on a topic. As with any research synthesis, they also reflect the judgments of the researchers. The length and detail vary by topic. Each synthesis will undergo open peer review, and be updated periodically based on feedback received on important missing studies and/or new research. Selected topics focus on national and international-level policies, while recognizing that other determinants of access operate at sub-national level. Work is ongoing on additional topics. We welcome suggestions on the current syntheses and/or on new topics to cover.
Open Access: This research synthesis is published Open Access, and distributed in accordance with the Creative Commons Attribution Non Commercial International (CC BY-NC 4.0) license, which permits others to distribute, remix, adapt, build upon this work non-commercially, and license their derivative works on different terms, provided the original work is properly cited and the use is non-commercial. Third party material are not included. See: https://creativecommons.org/licenses/by-nc/4.0/.