PER 2015
The price is around £3,000 per month. The National Institute for health and Clinical Excellence did reject Nexavar for NHS use based on its cost-benefit calculation. 15 Is it morally acceptable for pharmaceutical companies to set an enormously high price for drugs which are inexpensive to manufacture? Equally, is it ethical for any drug firms to charge high price in order to maximise profit at the expense of patients suffering from severe illnesses? Given the fact that there is not a quantitative measure or a clear line between what is moral and what is immoral under the context of businesses and people have different interpretations of business social responsibility in various circumstances, to fully answer and analyse the question, we have to understand how pharmaceutical industry works first and the nature of drug market. There are mainly three main stages of drug development namely, preclinical, clinical trials and review by regulatory body, for example, Food and Drug Administration (FDA) in the United States. Generally speaking, it takes about a decade or more to develop one new medicine from the time it is discovered to when it is available on the market for treating patients. The average cost to research and develop each successful drug is estimated to be $1 billion to $2 billion 16 , hugely depends on the target of treatment. Drug development essentially begins in the laboratory with research on animals, such as mice. Only one in ten potential treatments in the laboratory actually reach the clinical trial stage on humans. And from there only a fifth will make it through all three phases. The most common reasons for discontinuation are the effect of the treatment being too weak, the side-effects too great or the market for the treatment being too small. In recent years, the development cost has been under pressure as the increased complexity of clinical trials, a greater focus on chronic and degenerative diseases, and tests for insurers seeking comparative drug effectiveness data. Thereby, pharmaceutical companies all had had huge fixed costs before the mechanical manufacturing process started. Despite the variable cost of producing drug can be fairly low i.e. the price of active and inactive ingredients of the tablets, the companies have to pass on the extreme fixed cost to the consumers who are the governments or private medical services providers and hence, ultimately to the patients. Moreover, the pharmaceutical companies need to bear the risk of litigation when it turns out that their medicines cause unknown side-effects. A typical example of this is Thalidomide 17 . Thalidomide was sold worldwide before it was pulled out after thousands of babies were born with deformities. There are lawsuits against the firm producing Thalidomide across the world. One of the most recent cases is a lawsuit filed by more than 100 people in Australia and New Zealand. The British company Diageo, which did not distribute the drug but now owns the firm that did, agreed to pay £49million as compensation. Not only will the tremendous total cost of production keep the price high, the presence of chemical patent or drug patent from patent law will also favour the soaring price of medicine in another 15 Andrew Dillon, chief executive of NICE, argued that the drug does not provide enough benefits to patients to justify its high cost. He said: “The price being asked by Bayer is simply too high to justify using NHS money which could be spent on better value cancer treatments.” 16 A new report published by the Tufts Center for the Study of Drug Development (CSDD) pegs the cost of developing a prescription drug that gains market approval at $2.6 billion, a 145% increase, correcting for inflation, over the estimate the center made in 2003. 17 By 1960 thalidomide was found to damage the development of unborn babies, especially if it had been taken in the first four to eight weeks of pregnancy. The drug led to the arms or legs of the babies being very short or incompletely formed. More than 10,000 babies were affected around the world. As a result of this disaster, thalidomide was banned. Drug testing was also made more rigorous than before.
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