Ethics And Big Pharma Case Study
Burroughs Wellcome and “Ethics and Big Pharma”
a) Consumer Activist perspective
b) Business perspective
1. Should Big Pharma focus on the creation of shareholder value, the classic objective of business entities, or should this focus be mitigated by the “needs” of patients primarily, but also citizens in general?
a) Consumer Activist perspective:
I believe governments have a strong social and moral responsibility to all its citizens to allow the opportunity of accessing health care, to include medicines. The private industry has a social responsibility with its employees and their communities; they create jobs, provide benefits to their employees (medical insurance, retirement plans, appropriate working conditions, salaries, …show more content…
etc), and help communities prosper thru their tax contributions. This is as far as private industry contribution goes, beyond this point I believe the well being of citizens in general is the responsibility of our governments and not the private companies. Pharmaceutical companies are in business for financial gains. It’s nice to think that there are companies who as a priority care for the well being of their customers and they’re communities, but this is not what these companies are in business for. On the other hand, we the people have entrusted our government to decide what is best for us. Our government is the people’s ‘company’ and we are its ‘employees.’ Just like in the private industry in where it’s in the company’s best interest the well being of their employees to work and make profits for them, it should be in the government’s best interest the people’s well being so we can continue to produce and contribute to the prosperity of our nation (pay taxes). Less employees, lesser contributions.
b) Business perspective:
Pharmaceutical companies are in business for financial gains. They have a financial responsibility with its shareholders, which is to make profits. They also have a quality responsibility with their customers, to make quality products at competitive and reasonable prices, and to make the product easy to access and perform as expected. If a business has the competitive advantage of being the sole provider of a product or service, then it is expected for these companies to try and maximize their profits, regardless of what the product is. On the long run, unfair pricing and poor quality will create competition thus reducing prices and improving quality, but this is something for companies to consider as business decisions and not as social benefits to communities. If there is no illegality in taking advantage of its marketing position then why wouldn’t a company take advantage of this? If there are no moneys to be made, pharmaceutical companies wouldn’t be in business in the first place.
2. Do US patients who suffer from life-threatening illnesses have the right to drug(s) which treat their condition? How about foreign patients? I such rights are asserted who (or what entity) should have financial responsibility?
a) Consumer Activist perspective:
As a consumer activist, the most important aspect is to protect the consumer. Taking this stance, any US or foreign patient who suffers from life-threatening illness has the right to a drug or drugs which treat their condition. A main reason for this is that the consumer activist has the consumer’s best interests in mind. While the business is entitled to make a profit from the drug, it is more important that the public can afford the medicine. A way to make this possible is for the government to subsidize the cost of the drug to make it more affordable for consumers. “An estimated 40% of persons with AIDS have received care under the Medicaid Program, which is administered by the Health Care Financing Administration and funded jointly by the federal government (55%) and individual states (45%). Estimated annual costs for AIDS care and treatment funded by Medicaid ranged between $700 million and $750 million in 1988. Medicaid spending for AIDS was estimated to reach $2.4 billion in 1992. In addition, private insurers paid $250 million annually in AIDS-related medical payments.” Here both the federal and state’s governments along with insurance companies, have stepped in to help pay for the medicine. The issue for a consumer activist is that only 40% of persons with AIDS were able to take advantage of this subsiding. Every consumer should have the rights to needed medicine regardless of their financial situation.
b) Business Perspective:
From a business perspective, the most important aspect is to make a profit from the medicine.
Any US or foreign patient who suffers from life-threatening illness does not have the guaranteed right to a drug or drugs which treat their condition. If it wasn’t profitable to create and sell these drugs, no business would begin the process of making these drugs in the first place. In that scenario, no one would be able to buy the drug to help them. “The direct research and development costs associated with Retrovir were estimated to be about $50 million” but “when the costs of new plant and equipment to produce Retrovir were also considered, total research and development cost estimates ranged from $80 million to $100 million.” This is an initial investment made mainly by the company. The way to make a profit is to sell the medicine for a price that people are willing to pay. Also, “Wellcome PLC had spent $726 million for research and development on dozens of drugs in the five years preceding approval of Retrovir without producing a major commercial success.” Without this prior investment, they might not have been able to create the current drug. When it is put into prospective of an $826 million was invested to make this drug, they need to set the price fairly high to make a profit. However, the government did help by titling the drug an “orphan drug.” This means that “the orphan drug designation for Retrovir provided a seven-year marketing exclusivity after its commercial introduction, tax credits, and government subsidization of clinical trials.” Knowing this, the government won’t directly set the price but will have an effect on the pricing. “The Subcommittee on Health and the Environment of the U.S. House of Representatives had launched an investigation into possible “inappropriate” pricing of Retrovir.” This pressure forced Wellcome PLC to lower prices. However, the business made most of the initial investment so the majority of the responsibility
to set the price is theirs. This is especially true in foreign countries that the government hasn’t given any money to help create the medicine. In those countries, the price should be set only by Wellcome PLC. It would be wise of them to set the price fairly but no one has a given right to the drug.
3. Once a drug is developed and efficacy is provided to FDA standards, should a life-saving drug be made available to all via the limitation of patent protection given to such drugs, whatever the impact on the market?
a) Consumer Activist perspective:
We believe the government should attempt all efforts to make life-saving drugs available to all. The majority of drugs can be considered life-saving drugs, if you don’t have them when you need them, even a simple cut can lead to catastrophic consequences. The limitation of patent protection is a tool available to help make drugs accessible to the masses by allowing competition, and eliminating “temporary monopoly.” If a life-saving drug is developed but lengthy exclusivity is not issued to a specific company, competition is then created resulting in better quality and affordable prices. What about the company who has invested great amounts of moneys to reach a final product, is it fair to not allow them to recover their investment and generate profits? Our answer even looking at this as consumer activists is “no,” not only is it unfair, but it would create a lack of interest for any company to invest in creating these types of drugs. This is where we believe involvement from our government is needed to subsidize and make it attractable for companies to invest in Research and Development (R&D) of life-saving drugs without fear of not recovering their investment, and at the same time allowing the end user the ease of access and benefits of the drug. Limiting patent protection to life-saving drugs should be accompanied by alternate benefit options to those companies incurring in costs for R&D. From the perspective of a consumer activist, we seek the benefits of all who need life-saving drugs, but it is clear to us that companies need to see profits for us to continue benefiting from their efforts and products.
b) Business Perspective:
Pharmaceutical companies are created to generate profits for their shareholders. If there are to be limitations of patent protection, then there need to be other options that allow businesses to recover their investments and make profits. As a pharmaceutical company, millions of dollars are invested in hopes of reaching an end product, and to reach that end product many risks and uncertainties are taken. Patent Protection is a tool and incentive that allows pharmaceutical companies to recover investments and generate profits, if this tool is restricted then other avenues needs to be created to allow the recovery of moneys. If the probability of loss of moneys is greater than that of profitability, the risk will not be assumed by any company. No company wants to do the ‘grunt work’ and incur in millions of dollars in expenses to then easily (and freely) have to share its findings with the competition who will end up profiting without the risk or investment.
Summary:
As stated by our Declaration of Independence, we the people, have been given the gift of life and the right to live;
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are Life, Liberty and the pursuit of Happiness.”
This in no way states that we the people are entitled to anything free, but what it does state is that we have a right to access the things needed to pursuit our wellbeing. In the case of life-saving medication, the citizens needing them should all have the possibility of acquiring such medication without having to diminish their quality of life due to high prices. It is comforting to think that our government has created bureaucratic tools such as patent protection to create incentives for companies to invest in the R&D of life-saving medications; unfortunately, these same tools have generated unintended consequences such as out of control pricing and the creation of monopolies. The wellbeing of our citizens is the responsibility of our government and not of the private industries. Businesses are created to generate profits by providing the best services and products possible in a competitive market. Our government is created by the people and for the people and therefore is responsible for assuring our basic needs, amongst them the opportunity to access life-saving medications.
a) Consumer Activist perspective
b) Business perspective
1. Should Big Pharma focus on the creation of shareholder value, the classic objective of business entities, or should this focus be mitigated by the “needs” of patients primarily, but also citizens in general?
a) Consumer Activist perspective:
I believe governments have a strong social and moral responsibility to all its citizens to allow the opportunity of accessing health care, to include medicines. The private industry has a social responsibility with its employees and their communities; they create jobs, provide benefits to their employees (medical insurance, retirement plans, appropriate working conditions, salaries, …show more content…
etc), and help communities prosper thru their tax contributions. This is as far as private industry contribution goes, beyond this point I believe the well being of citizens in general is the responsibility of our governments and not the private companies. Pharmaceutical companies are in business for financial gains. It’s nice to think that there are companies who as a priority care for the well being of their customers and they’re communities, but this is not what these companies are in business for. On the other hand, we the people have entrusted our government to decide what is best for us. Our government is the people’s ‘company’ and we are its ‘employees.’ Just like in the private industry in where it’s in the company’s best interest the well being of their employees to work and make profits for them, it should be in the government’s best interest the people’s well being so we can continue to produce and contribute to the prosperity of our nation (pay taxes). Less employees, lesser contributions.
b) Business perspective:
Pharmaceutical companies are in business for financial gains. They have a financial responsibility with its shareholders, which is to make profits. They also have a quality responsibility with their customers, to make quality products at competitive and reasonable prices, and to make the product easy to access and perform as expected. If a business has the competitive advantage of being the sole provider of a product or service, then it is expected for these companies to try and maximize their profits, regardless of what the product is. On the long run, unfair pricing and poor quality will create competition thus reducing prices and improving quality, but this is something for companies to consider as business decisions and not as social benefits to communities. If there is no illegality in taking advantage of its marketing position then why wouldn’t a company take advantage of this? If there are no moneys to be made, pharmaceutical companies wouldn’t be in business in the first place.
2. Do US patients who suffer from life-threatening illnesses have the right to drug(s) which treat their condition? How about foreign patients? I such rights are asserted who (or what entity) should have financial responsibility?
a) Consumer Activist perspective:
As a consumer activist, the most important aspect is to protect the consumer. Taking this stance, any US or foreign patient who suffers from life-threatening illness has the right to a drug or drugs which treat their condition. A main reason for this is that the consumer activist has the consumer’s best interests in mind. While the business is entitled to make a profit from the drug, it is more important that the public can afford the medicine. A way to make this possible is for the government to subsidize the cost of the drug to make it more affordable for consumers. “An estimated 40% of persons with AIDS have received care under the Medicaid Program, which is administered by the Health Care Financing Administration and funded jointly by the federal government (55%) and individual states (45%). Estimated annual costs for AIDS care and treatment funded by Medicaid ranged between $700 million and $750 million in 1988. Medicaid spending for AIDS was estimated to reach $2.4 billion in 1992. In addition, private insurers paid $250 million annually in AIDS-related medical payments.” Here both the federal and state’s governments along with insurance companies, have stepped in to help pay for the medicine. The issue for a consumer activist is that only 40% of persons with AIDS were able to take advantage of this subsiding. Every consumer should have the rights to needed medicine regardless of their financial situation.
b) Business Perspective:
From a business perspective, the most important aspect is to make a profit from the medicine.
Any US or foreign patient who suffers from life-threatening illness does not have the guaranteed right to a drug or drugs which treat their condition. If it wasn’t profitable to create and sell these drugs, no business would begin the process of making these drugs in the first place. In that scenario, no one would be able to buy the drug to help them. “The direct research and development costs associated with Retrovir were estimated to be about $50 million” but “when the costs of new plant and equipment to produce Retrovir were also considered, total research and development cost estimates ranged from $80 million to $100 million.” This is an initial investment made mainly by the company. The way to make a profit is to sell the medicine for a price that people are willing to pay. Also, “Wellcome PLC had spent $726 million for research and development on dozens of drugs in the five years preceding approval of Retrovir without producing a major commercial success.” Without this prior investment, they might not have been able to create the current drug. When it is put into prospective of an $826 million was invested to make this drug, they need to set the price fairly high to make a profit. However, the government did help by titling the drug an “orphan drug.” This means that “the orphan drug designation for Retrovir provided a seven-year marketing exclusivity after its commercial introduction, tax credits, and government subsidization of clinical trials.” Knowing this, the government won’t directly set the price but will have an effect on the pricing. “The Subcommittee on Health and the Environment of the U.S. House of Representatives had launched an investigation into possible “inappropriate” pricing of Retrovir.” This pressure forced Wellcome PLC to lower prices. However, the business made most of the initial investment so the majority of the responsibility
to set the price is theirs. This is especially true in foreign countries that the government hasn’t given any money to help create the medicine. In those countries, the price should be set only by Wellcome PLC. It would be wise of them to set the price fairly but no one has a given right to the drug.
3. Once a drug is developed and efficacy is provided to FDA standards, should a life-saving drug be made available to all via the limitation of patent protection given to such drugs, whatever the impact on the market?
a) Consumer Activist perspective:
We believe the government should attempt all efforts to make life-saving drugs available to all. The majority of drugs can be considered life-saving drugs, if you don’t have them when you need them, even a simple cut can lead to catastrophic consequences. The limitation of patent protection is a tool available to help make drugs accessible to the masses by allowing competition, and eliminating “temporary monopoly.” If a life-saving drug is developed but lengthy exclusivity is not issued to a specific company, competition is then created resulting in better quality and affordable prices. What about the company who has invested great amounts of moneys to reach a final product, is it fair to not allow them to recover their investment and generate profits? Our answer even looking at this as consumer activists is “no,” not only is it unfair, but it would create a lack of interest for any company to invest in creating these types of drugs. This is where we believe involvement from our government is needed to subsidize and make it attractable for companies to invest in Research and Development (R&D) of life-saving drugs without fear of not recovering their investment, and at the same time allowing the end user the ease of access and benefits of the drug. Limiting patent protection to life-saving drugs should be accompanied by alternate benefit options to those companies incurring in costs for R&D. From the perspective of a consumer activist, we seek the benefits of all who need life-saving drugs, but it is clear to us that companies need to see profits for us to continue benefiting from their efforts and products.
b) Business Perspective:
Pharmaceutical companies are created to generate profits for their shareholders. If there are to be limitations of patent protection, then there need to be other options that allow businesses to recover their investments and make profits. As a pharmaceutical company, millions of dollars are invested in hopes of reaching an end product, and to reach that end product many risks and uncertainties are taken. Patent Protection is a tool and incentive that allows pharmaceutical companies to recover investments and generate profits, if this tool is restricted then other avenues needs to be created to allow the recovery of moneys. If the probability of loss of moneys is greater than that of profitability, the risk will not be assumed by any company. No company wants to do the ‘grunt work’ and incur in millions of dollars in expenses to then easily (and freely) have to share its findings with the competition who will end up profiting without the risk or investment.
Summary:
As stated by our Declaration of Independence, we the people, have been given the gift of life and the right to live;
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are Life, Liberty and the pursuit of Happiness.”
This in no way states that we the people are entitled to anything free, but what it does state is that we have a right to access the things needed to pursuit our wellbeing. In the case of life-saving medication, the citizens needing them should all have the possibility of acquiring such medication without having to diminish their quality of life due to high prices. It is comforting to think that our government has created bureaucratic tools such as patent protection to create incentives for companies to invest in the R&D of life-saving medications; unfortunately, these same tools have generated unintended consequences such as out of control pricing and the creation of monopolies. The wellbeing of our citizens is the responsibility of our government and not of the private industries. Businesses are created to generate profits by providing the best services and products possible in a competitive market. Our government is created by the people and for the people and therefore is responsible for assuring our basic needs, amongst them the opportunity to access life-saving medications.