Ethical Implications Of Pharmaceutical Markups

What are the ethical implications of pharmaceutical markups?

Everyone needs medication at some point in their lives, and pharmaceutical companies provide that medication to us. According to the International Trade Commission, pharmaceutical companies research, develop, manufacture, and market drugs and biologicals for human or veterinary use (Trans-Pacific Partnership). This is not only a very important role, but it’s an expensive one, too. As a result, pharmaceutical companies have to charge high prices in order to make a profit. However, many believe that in the US, pharmaceutical companies have created a monopoly, allowing them to charge much more for drugs than necessary. The companies claim higher markups are needed due to the expenses

If the medication is just too costly, the patient will be forced to go without it, even if it is desperately needed.

Stakeholder #1

Pharmaceutical companies face many expenses due to the amount of research, development, and marketing that is put into the creation of drugs. The pharmaceutical industry claims it costs $2.6 billion to develop a new prescription medicine that gains marketing approval (Carroll, 2014). For this reason, pharmaceutical companies argue that high prices are valid and needed. Pharmaceutical companies usually determine drug prices by looking at the market and estimating the number of patients who will potentially take the drug, how long patients will have to take it, how much insurance companies are paying for similar drugs, and how likely physicians are to use their drug versus others on the marketplace (Kodjak, 2016). This process was examined during a Senate investigation after the Company Gilead Sciences created the drug Sovaldi, a drug which cures Hepatitis C, and priced

Customers may rely on a medication to live a normal life, and sometimes, a drug company may change the price, making a needed drug now become unavailable to the patient. Additionally, pharmaceutical companies may introduce a new drug which could save many lives, such as the previously mentioned Hepatitis C drug, but when such breakthroughs occur, drug companies place incredibly high rates that make the drug unaffordable to many, even if they have health insurance. The health insurance plan each person has contains a list of drugs which are covered and paid for by the insurance company. This list is called a formulary, and when certain drugs on the list become more expensive, the insurance companies begin dropping them from the list. This is bad if someone needs a specific drug because now they have to find a similar drug that is covered with their plan, or they have to switch health insurance plans altogether (Kodjak, 2016). Another solution to the problem would be to turn to generic medications; however, that is not working out for patients like it should because the pharmaceutical industry has made it harder for generic drugs to be made. Pharmaceutical companies do this in several different was, such as by paying a generic company not to launch a generic version (“pay for delay”), or by restricting access to samples for testing. This does not result in the