The Ethics of Drug Pricing

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The Ethics of Drug Pricing

EpiPen is a device that stops potentially fatal allergic reactions by injecting a precise dose of epinephrine. It has become a requirement for families with children suffering from counter effects like wheezing, uneven breathing, increased or decreased heart rate, swelling and other potentially fatal reactions. The price of this product was $100 for a two-pack until it raised to $608.61 in the year 2016. These prices tremendously inflated due to the actions of the top executives of the pharmaceutical company; thus, the moral agent whose actions will be analyzed are the top executives of this company. The ethical issue that arises from this scandal is whether or not these prices are ethical.

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Mylan, the pharmaceutical company that owns EpiPen, had been gradually raising the whole price. Previously, pharmacies paid less than $100.00 for a two-set pen, but in the year 2009, a pharmacy paid $103.50 for a set. On July, 2013 the price escalated to $264.50 and again escalated 75% to $461 by the year 2015. According to “Elsevier Clinical Solutions’ Gold Standard Drug Database”, the price of the EpiPen spiked again to $608.61 in the year 2016. It has been reported that Mylan reaped in nearly $300 million in compensation from 2011 to 2015. Due to its tremendous hiked up prices, the top executives of the pharmaceutical company such as the CEO, Heather Bresch, were heavily criticized and the public was outraged. People questioned whether or not these prices were ethical. To justify the company’s actions, Heather Bresch blamed the rise of the price of its drug on Obamacare and the rise. This scandal is interesting because of the way Bresch responded to the criticism she received for her decision. Instead of owning up to the idea that it was irrational and inequitable, her initial reaction was to blame Obamacare and the rise. Through this scandal, there have been various perspectives on the ethics of this pricing. Some of the various perspectives on the ethics of this pricing are: utilitarian, deontologist, and virtue ethicist. Through these three crucial theories, it will demonstrate whether or not Mylan’s action was justifiable or not.

 There are two types of utilitarianism which are rule and act utilitarianism. The difference between these two types are act utilitarianism is the belief that it is the right action that brings the greatest total happiness whereas rule utilitarianism is the belief that the moral correctness of an action depends on correctness of the rules that allows it to achieve the greatest total happiness. Generally, the main concept of utilitarianism is the greatest happiness principle. This principle primarily states that an act is morally better than alternatives if it creates the greatest total happiness. By happiness is “…intended pleasure and the absence of pain…”[footnoteRef:1]. For instance, a utilitarian would get the Anne Frank case right because a utilitarian would lie to save Anne Frank in order to minimize suffering or pain. Additionally, it focuses on the consequences rather than the means. Means refers to any action whereas the ends or consequences refers to the sole purpose of achieving something else.  An example of this is the Trolley Problem where there is both an innocent person and five other innocent people on the track ahead of the trolley. The dilemma is that if you allow the track to run its course, one person will die or if you change the tracks, then five people will die. A utilitarian will decide to let the innocent person to die for the sake of saving five people. Thus, a utilitarian would have better solved the situation. A utilitarian would have used the greatest happiness principle as its test for permissibility because the action is considered moral as long as it is the optimal choice in increasing utility and minimizing pain. Not only that, a utilitarian would have considered everyone, all options and put the correct value on things in its calculations. Thus, a utilitarian would have opposed to Mylan’s actions. Mylan was generating satisfactory profits before the price hike, and even during the years of the increase the product was still affordable. On the other hand, the price has gone to the extreme and stakeholders are more outraged than Mylan is satiated with its profits. People have taken to protesting by “… marching to Mylan’s headquarters and 500,000 individuals have signed a petition…”.[footnoteRef:2] Evidently, Mylan’s action would not be considered moral since it did not minimize the pain, which would be the outrage of the clients.  [1:   Mill, John Stuart. Utilitarianism by John Stuart Mill. Edited by J. Bulger, Ph.D., 1.

]  [2:  EndPlay. “500,000 Petitions Delivered to Mylan Headquarters in Protest of EpiPen Price Hike.” WPXI. August 30, 2016. Accessed December 24, 2018. https://www.wpxi.com/news/500000-petitions-delivered-to-mylan-headquarters-in-protest-of-epipen-price-hike/433058945.  ]

 On the other hand, a deontologist would do the complete opposite than that of a utilitarian. The foundation of this theory is duty or obligation. Unlike utilitarianism, nothing but the means matter. According to this theory, we are morally obligated to act in accordance with a set of principles and rules regardless of the outcome. In relation to this theory, one version of the categorical imperative is “The Formula of the End in Itself”. Kant states this formula as “Act in such a way that you always treat humanity, whether in your own person or in the person of any other, never simply as a means but always at the same time as an end.[footnoteRef:3] Kant argued that an action done without the motive of duty would then be without moral value; and therefore, insignificant. Kant also stated that nothing is good without qualification except a good will and a good will is one that wills to act in accord with the moral law and out of respect for the law rather than out of inclinations. Evidently, it can be said that he perceived the moral law as an unconditional command. An example of this is if a person proposed to kill everyone currently living on land that could not support agriculture in order to bring a world without starvation, a deontologist would argue that this would without starvation was a poor state of affairs because of the way in which it was brought about. Additionally, because this theory is about following duties, a deontologist will not be able to lie because a deontologist has a duty to be honest. For instance, you would have to give up Anne Frank if she is hiding in your house because you can’t lie. For the EpiPen scandal, a deontologist would only raise the price of the drug if it goes with its set of moral values and the people will not be harmed from this act. However, Mylan’s action would have only complied to the notion of acting rationally when they increased their product’s price. Yet, they did not allow others to act rationally since they were in a compromising position. For instance, a rational customer would purchase the cheaper of the two options, but Mylan had its customers pushed towards a place only supported by the EpiPen. Mylan also lacked respect for their consumers, otherwise they would have priced their products at a level that would allow for increased profits at an affordable price. Furthermore, Mylan was motivated by self-gain which is considered unethical by a deontologist. [3:  Cahn, Steven M. Exploring Ethics: An Introductory Anthology. New York: Oxford University Press, 2009., 411.

Virtue Ethics is a theory similar to deontology. Conversely, virtue ethics emphasizes the virtues or moral character rather than duty or obligation. It stems from good intentions but in a business setting, this theory is considered as not ideal. This theory is not ideal in the business setting because corporations are looking to hire for employees who will assist in turning a profit rather than exploring the human nature. A virtue ethicist would focus on evaluating the rightness of the action rather than the moral rules. An example of this in the trolley problem is that a virtue ethicist would throw the switch in the trolley problem because I am a virtuous person and saving five people is the type of compassionate act a virtuous person executes. Another instance is the Nazi asking whether or not you have Anne Frank. A virtue ethicist would have lied to them for the sake of kindness which is considered as one of the admirable character traits. In this case, a virtue ethicist would have demonstrated how the CEO of EpiPens were after profits and therefore controlled by greed, which culminated from their characters. Not only that, some of the admirable character traits are courage, honesty, and justice. In a company, courage has to do with its level of risk-taking whether they uphold right ideas and actions. It can be argued that although Mylan did take a risk in raising the price of their product, it was not to uphold right ideas. Honesty in a company refers to the company’s trustworthiness in agreement. This was not upheld in the company since Mylan lied about the EpiPen’s profits. Justice examines if the company engages in hard work, good ideas, and fair practices. Mylan’s work had produced quality products, excellent ideas, but were not fair in executing them out. Although Mylan was courageous in raising the price of their product, they were dishonest, misguided, and unfair.

 Mylan executives’ decision on raising the price of EpiPen to this extent is not morally justifiable and has negatively affected the consumers who relied on the EpiPen. Instead of Mylan’s objective being to promote the health of the population, it was solely on raising its profits. Additionally, Mylan chose an action that did not fully take into account the health of others. It can be said that if Mylan researched more on the effects of different levels, it would have not made its decision of setting the price of the EpiPen so high. By collecting data of different regions, they could have found a price affordable for all regions. Because Mylan is facing a major setback with criticisms from their consumers, Mylan needs to go about this issue carefully if they want to persist in being profitable and remain the market leader when the patent expires. Mylan’s first goal is to fix problems such as the lack of consideration for the lives of patients and then address the company’s motives. Because the patent is expiring soon, Mylan lower the price of the EpiPen. Mylan should also work with insurance companies to offer higher rebates and other deals to aid in paying for EpiPens. Evidently, these types of actions such as calculating, considering all options, and putting the correct value on things is what an utilitarian would do. With this said, various perspectives from a utilitarian, deontologist, and a virtue ethicist have demonstrated that the prices of the EpiPen are unethical. Therefore, Mylan’s actions are unjustifiable.

Bibliography:

  1. Mill, John Stuart. Utilitarianism by John Stuart Mill. Edited by J. Bulger, Ph.D
  2. EndPlay. “500,000 Petitions Delivered to Mylan Headquarters in Protest of EpiPen Price Hike.” WPXI. August 30, 2016. Accessed December 24, 2018. https://www.wpxi.com/news/500000-petitions-delivered-to-mylan-headquarters-in-protest-of-epipen-price-hike/433058945.
  3. Cahn, Steven M. Exploring Ethics: An Introductory Anthology. New York: Oxford University Press, 2009.
  4. Tuttle, Brad. “EpiPen Prices: Mylan CEO Heather Bresch & Big Pharma Scandal |  Money.” Time, Time, 21 Sept. 2016, time.com/money/4502891/epipen-pricing-scandal-big- pharma-politics/.
  5. Miyashiro, Andreas Kanaris. “Mylan’s EpiPen Pricing Scandal.” Sevenpillarsinstitute.org. September 14, 2017. Accessed October 19, 2018. https://sevenpillarsinstitute.org/mylans- epipen-pricing-scandal/. 
  6. Willingham, Emily. “Why Did Mylan Hike EpiPen Prices 400%? Because They Could.” Forbes. August 25, 2016. Accessed October 20, 2018.   

 

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The Ethics of Drug Pricing. (2020, Feb 26). Retrieved September 29, 2022 , from
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