Ethical and Economical Perspectives in Drug Pricing Decisions

This essay examines the ethical complexities of drug pricing within the healthcare sector, focusing on the conflict between ethical considerations and economic realities. It explores decision-making processes influenced by political, legal, and technological factors, while also analyzing strategies implemented by other countries to control drug costs. The essay highlights the ethical imperative for drug prices to reflect market size and development costs, while also addressing the unethical practice of price hikes during disease outbreaks. It references examples like Valeant Pharmaceutical International and the high drug prices in the United States, which are attributed to high R&D costs and profit-driven strategies. The study concludes by recommending legal frameworks similar to those in European countries, where pharmaceutical companies face price restrictions, and suggests government investment in pharmaceutical companies to manage drug prices effectively.

Decision making
STUDENT DETAILS
STUDENT DETAILS

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In this essay, there will be a discussion about the ethical issues that are being
considered while deciding the price of the drugs in the healthcare industry. Drug prices have
become the topic of high heated at both levels, political and economical. As this issue of drug
prices also triggers the emotional stage which creates the line between ethics and economical
perspective (Walker, Boyce, Geller, Thio & Kahn, 2018). As the World Health Organization
(WHO) is addressing their concern which implies that drug prices should be kept low in the
healthcare industry at the global level due to various external factors. In this essay, there will
be a discussion about the ethical issues that are being concerned while deciding the drug
prices, decision making will be done for drug prices through the political, legal and
technological environment, steps which are implemented by the other countries for this issue
will also be discussed.
The ethical decision making for the global drug prices involves that cost of the
medicines or drugs should determine by estimating the size of the market in relation to the
development cost of the drug. As it is implying that the large size of the market consists of
the combination of people who are financially sound and who are dealing with various
financial challenges (Babyar, 2017). Ethical decision making also implies that an
organization that makes medicines or drugs, if they notice that any disease or viral is
spreading then they should lower the prices of that particular vaccine or cure or medicine.
Although, in reality, it is noticed that the companies raise the price of the vaccine or drugs
after noticing any certain disease is spreading and they called it as the principle of running
their business. For example: Valeant Pharmaceutical International hike their prices by 3 times
"Nitropress” in the United States in the year 2015. This medicine is used to treat high blood
pressure in an effective and efficient way. Public outrage also used this example in their
speeches and linked it with the unethical business move (Congress, 2018).

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Drug prices are high in the United States because drug-making industries in the
United States operate with the large and advance R&D department and according to them the
reason behind high drug prices is that new and improved drug requires a lot of invention with
high cost. Moreover, various researchers and journalists concluded that drug makers in the
United States see the drug market as the high profitability industry and they intentionally set
high prices in order to gain more profits. According to the WHO, in the year 2019, the United
States stands at top of the list which has high drug prices in the world. This global issue of
high drug prices is also creating political and legal pressure in many countries such as
America, Russia, Australia, etc (Congress, 2018). As the government of many countries takes
consistent steps to lower down the prices of the drugs in their country. However, politicians
in these countries use this topic as a strong weapon to fascinate the voters in an effective and
efficient way. Many politicians in many countries utilize this issue in their political agenda
and they make strong promises with their citizen to reduce the price of drugs in their country
(Dusetzina, Huskamp & Keating, 2019).
Moreover, various countries also take effective steps to lower the prices of drugs.
Four European countries such as France, Germany, Sweden and the United Kingdom had
implemented the research-based pharmaceutical framework to lower the prices of the drugs.
Under this framework, pharmaceutical industries have to conduct a research on two concepts
before setting the prices of the drug. Firstly, the drug manufacturer has to follow the legal
regulation and they are not allowed to set the prices above 30% of their marginal cost
(Ghanemi & Yan, 2017). Second, they have to study for the insurance coverage and when
any diseases are spreading at a high level, if they have anti-medicine for that particular
disease then they have to reduce the price of that drug. Apart from this, even in the year 2020,
the United States is facing the adverse challenges due to the high drug prices and even after

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implementing major laws (such as the Prescription Drug Pricing Reduction Act (PDPRA) of
2019) in the country (Walker, Boyce, Geller, Thio & Kahn, 2018).
It is suggested that the countries who are facing challenges from the global drug
prices should also implement the new law on the pharmaceutical industries under which they
cannot increase the price of the drug more than 30% of their marginal cost. Moreover,
electronic prescribing of controlled substances (EPCS) and prescription drug monitoring
programs are the techniques which are implemented by the pharmaceutical industries at the
global level in order to test the drugs. However, these technologies are not related to set the
prices of the drugs, but it is suggested that the government should also utilize these
techniques in order to monitor the operational management of this industry (Ghanemi & Yan,
2017). Now, if the government put the legal consideration on monitoring the operational
management of the pharmaceutical industry then from the legal perspective, it may create
various legal challenges for the government because companies can deny to not to showcase
their operational management performance. It is recommended that the government should
implement the same laws as of the four European countries, under this law pharmaceutical
companies are not allowed to set the prices of their drugs more than 30% of its marginal cost.
Apart from this, it will be better if governments of the world start making the drugs by
investing in their own pharmaceutical companies in an effective and efficient way
(Dusetzina, Huskamp & Keating, 2019).
It is concluded that the topic of high drug prices is the most heated topic around the
globe. Even, WHO always expresses its concern and suggests effective measures so that the
governments of the world can lower down their prices. In this study, it is concluded that four
European countries such as France, Germany, Sweden and the United Kingdom had
implemented the research-based pharmaceutical framework in order to prevent the high
prices of the drugs.

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References
Babyar, J. (2017). Drug Pricing and Trust: The Time Is Right. Journal of Pharmaceutical
Innovation, 12(2), 182-184.
Congress, T. (2018). Drug pricing. New York: The New York Times.
Dusetzina, S. B., Huskamp, H. A., & Keating, N. L. (2019). Specialty drug pricing and out-
of-pocket spending on orally administered anticancer drugs in Medicare Part D,
2010 to 2019. Jama, 321(20), 2025-2027.
Ghanemi, K., & Yan, S. (2017). Selected concepts on ethics in biopharmaceutical
innovation. MOJ Proteomics Bioinform, 6(4), 337-340.
Walker, A., Boyce, A., Geller, G., Thio, C. L., & Kahn, J. P. (2018). Direct-acting antivirals
and hepatitis C: the ethics of price and rationing by genotype. Clinical Infectious
Diseases, 67(6), 983-984.