PER 2015
expanding their market in less developed countries to help more people will be a better way to allocate the limited resources and it can improve the income inequity problems in the global economy. In terms of the ethics, there will be motive for some drugs to be invented to some disease which is more common in the less developed countries and more people can be benefited from it.
“It is immoral for the drug companies to charge large sums for drugs that are cheap to manufacture.” Discuss Aman Nath It is often the case today for essential, price inelastic drugs to be supplied at extortionate prices despite their cheap production costs. Whether one blames the selfish drug companies, the tedious patent system, the government or our own capitalist ideologies, there are two critical sides to the potential argument that pharmaceutical companies should lower prices in order to favour those on lower incomes; one side favouring the retention of high prices, the other lowering prices. Much of the cost comes down to the background of producing the drug. When a drug firm pitches an idea for a potential drug, on average, it takes twelve years for the final product to be released onto the market, after the huge costs of laboratory work, trials and patenting. One may argue that these costs should be recovered, fairly, and reward the hard work of the workers in forms of handsome profits. In the UK, the NHS is free to the point of delivery, providing certain drugs free of charge to patients. Likewise, if people have private insurance, a much greater ideology in the USA, their insurers will pay out huge sums of money in order to pay for the drug to meet the patient’s needs. Thus, in this sense, the drug companies are not directly extorting individuals, but rather setting a high base rate for the insurers. One must question, however, whether the individuals in a society can continue living with the high costs of drugs and for how long. From the very first idea of a potential drug to the moment in it is released, drug firms invest both great amounts of money and time. On average, a drug takes 12 years to produce and around £1 billion. As seen from the diagram below, there are many stages to drug production and so, many stage for something to go wrong. Thus, one may argue that it is right for drug firms to charge high prices for drugs, despite their low production cost, in order to reward their patience and effort over the long time frame. The price of failure in the drug market could be considered to justify the high cost of drugs, despite their low production costs. A drug in production may not reach the market due to two significant reasons; it has a low success rate, the side effects are too detrimental. ‘Sometimes scientists working for industry don’t get the same results as the scientists who first carried out experiments on a new drug, so development is halted.’, ‘In other cases it’s a result of researchers not fully understanding how a drug affects cells (so not anticipating its adverse effects).’, ‘if there is no clinical test to prove the drug’s hitting its target, doctors might not know if patients are receiving the correct dose in clinical trials.’ 10 Moreover, strict regulations imposed by the government to ensure drugs meet certain safety standards increase costs of production, thus raising the final product price. Moreover, production costs in developed countries are more expensive compared to third world countries as a result of this red tape. If the drugs were to be produced in less well of countries, for example China, it is possible that they could be defective and harmful, resulting in more damage than good. ‘Even though extensive testing is done in healthy volunteers and people with the disease before the drug is approved, not all side effects may be found due to the diversity of the human population’. 11
10 http://scienceblog.cancerresearchuk.org/2014/12/16/dances-with-pharma-part-1-why-are-drugs-so- expensive/ 11 https://seventhstreetdev.sharepoint.com/Documents/Why%20Are%20Drugs%20So%20Expensive.pdf
22
Made with FlippingBook flipbook maker