Importance of Ethical Pricing Strategies in Pharmaceutical Companies

In this document we will discuss about Importance of Ethical Pricing Strategies and below are the summary points of this document:- Recent pricing strategies by pharmaceutical companies have been controversial, leading to accusations of greed and exploitation of vulnerable patients The ethics of pricing in the pharmaceutical industry is a hotly debated issue, with stakeholders and policymakers calling for government regulation Balancing the need to recoup research and development costs with the ethical imperative to make life-saving drugs affordable for all is a complex challenge for pharmaceutical companies.

Business Ethics
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Business Ethics
Sir/Madam,
This mail is in reference to the planning of the pricing strategy considering its ethical aspects.
This is a very important aspect that strategic pricing of drugs in a pharmaceutical
organization needs to cover as the increasing questionable actions and its impact on the
business for long term sustenance. In August 2015, Daraprim was bought by Turing
Pharmaceuticals Company from Impax Laboratories, Inc. Daraprim is a well-known drug
which treats parasitic infections and popular among AIDS and cancer patients who have
weak immune system. The CEO of Turing Pharmaceuticals, Mr. Martine Shkreli, increased
the price of the drug by 5000 times. However after much protest Mr. Martine Shkreli had to
lower the price however it is still very much expensive. Also, Valeant Pharmaceutical
International another reknowned pharmaceutical business organization also increased the life
saving drug the Nitropress which is used by high blood pressure patients (Mclean, 2016).
Therefore, recent expensive pricing strategy by pharmaceutical businesses has projected
themselves as a bunch of greedy corporations who is willing to utilize and exploit miserable
and desperate patients with limited to no alternative for saving their lives with an objective to
make maximum profit. Unfortunately, there are lot of ethical issues associated with pricing
strategy of pharmaceutical organization.
In the contemporary capitalist market, companies are permitted indeed, encouraged to charge
what the market will bear. There are alternatives: we could socialize pharmaceuticals the way
we’ve socialized mail delivery. So perhaps we should treat pharmaceuticals as special, but we
haven’t. To my mind, pricing is a fringe issue, ethically, and perhaps mostly a political issue.
However, considering the pharmaceutical agencies and organizations’ perspective it can be
said that these pharmaceutical organizations invests millions in research and development.
Therefore, justification for increase in pricing is explained. The ethical aspect of saving
human lives over shadows the cost and investments in research and development by
pharmaceuticals businesses. The availability of this generic live saving drug will become
more difficult (Schoonveld, 2016). The burdens of increased price of the generic drug are
often distributed among the stakeholders like patients, clinics, hospitals and insurance
companies. Therefore, debates about government regulation over pharmaceutical
organization’s pricing strategy are often discussed. Turing Pharmaceutical’s increasing price
of Daraprim grabbed international attention and as a result huge protests from medical
practitioners and patients were conducted and thus the organization has to lower the pricing
of Nitropress from $750 dollars of one tablet to $750 dollar strip. In this crisis situation, the
consumers largely on policy makers and political leaders for a meaningful solution (Kirkner,
2016).
Unwanted or unreasonable pricing strategy can lead to unwanted attention from stakeholders
and federal government. Therefore, according to me we have to analyse the different socio-
economic aspects associated with the new drug and then formulate the pricing strategy. I
hope this email report facilitates you in taking appropriate decision in favour of our
organization.
Thank You
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Business Ethics
XYZ
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Business Ethics
Reference
Kirkner, Richard Mark. "Drug Pricing Regulation Pushed From Many Sides." MANAGED
CARE (2016).
McCarthy, Katie, and Richard J. Hunter. "Issues Relating to Pharmaceuticals in the United
States: Pricing, Generics, Products Liability and Social Responsibility." Int J Res
Manag, Econ Com 7.12 (2017): 116-23.
Mclean, Bethany. "The Valeant meltdown and Wall Street’s major drug problem." Vanity
Fair (2016).
Schoonveld, Ed. The price of global health: drug pricing strategies to balance patient access
and the funding of innovation. Routledge, 2016.
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