Ethical Issues Rooted in the Business Models of Today’s Pharmaceutical Companies

Although there are many reasons for starting a business, the underlying goal of all entrepreneurs is profit. Today’s pharmaceutical companies are built on the same foundation, gearing all of their production efforts towards boosting revenue. However, because of this profit-first mentality, pharmaceutical companies focus on producing drugs that are either on patent-periods or treat only the common medical conditions for the average consumer. In this way, placing profit at the center of drug development limits our ability to prevent disease outbreaks.

Vaccine development is necessary to cure the most dangerous and prolific diseases of our time, but it is non-vaccine related medicines that are the most profitable. Pfizer, one of America’s top pharmaceutical companies, generates more revenue from Lipitor, a single cholesterol-lowering drug, than is generated by the entire worldwide vaccine industry [1]. Therefore, lucrative drugs like Lipitor are sequestering most of funding and resources for development. Although this seems unfair, the reality is that pharmaceutical businesses are just that, a business and the bottom line is profit. Major American pharmaceutical companies are producing the medicines that they know American consumers will purchase on a regular basis, providing consistent returns. Consumer demand drives production decisions and hence medicines for common conditions like high cholesterol and heart disease—even trivial things like hair-loss drugs—are funded preferentially to the research and production of vaccines.  Though the companies’ decisions are entirely money-centric, they are still helping a great number of people with common medical issues. Therefore, could these decisions still be considered immoral?

Vaccine development is necessary to cure the most dangerous and prolific diseases of our time, but it is non-vaccine related medicines that are the most profitable.

Many people believe pharmaceutical corporations, and the governments who direct them, are in fact corrupt. Some argue that the current system of vaccine production and patent control has allowed the industry to become a monopoly where single companies have complete control over the production and price of important drugs. Under FDA regulation, a pharmaceutical company has a 20-year period during which they control the patent for a new drug and therefore are the sole producer of that drug [2]. They are allotted this time so that they can earn a positive return on the millions of dollars they invested into research and development. With complete control over the drug’s production and price, the company could raise the price however they choose, thereby taking advantage of desperate consumers who have no other choice than to buy the single and most expensive option for treatment. In response, “public health groups in Asia, Latin America, and the United States, have launched campaigns to break the monopoly (created by the health industry) and promote access to generic versions of critical medicines” [3]. If medical patents were made public and drugs produced in “generic” form, advocates claim this would increase the supply of vaccines because multiple companies could produce the drug at once. The price would then drop to accommodate the increase in supply. At this lower price, people could acquire the treatment they need when they otherwise would have no other resources for aid [1].

However, putting the multi-billion dollar pharmaceutical companies out of business by opening the drug patents to other companies may not be the best decision.  Despite their perceived “immoral” business practices, the companies still have an abundant amount of resources capable of producing vaccines on a massive scale.

The problem is that companies that produce vaccines currently lack the funds to produce the amount of medicine necessary to reduce the spread of the diseases. Specifically, recent outbreaks such as the Ebola virus have shown that it’s not finding the cure that is difficult, it’s finding the money to produce enough of the cure.  When the founder of Okairos, a company that produces an Ebola vaccine made by GlaxoSmithKline (GSK), says “we could make 100,000 doses (of the vaccine) per month”, one would think that sounds very promising for counteracting Ebola’s spread. However, when it is revealed that producing that much of the vaccine would require a $10 million investment in order to produce the doses within a month, the difficult reality of the situation becomes clear [4].  Most of these companies either don’t have the money to produce the vaccine, like in the case of Okairos, or feel that curing the disease is not worth the loss in profits if resources are directed away from producing other drugs.

Superseding these economic complexities is the reality that there are still people dying from preventable diseases like Ebola, and this number grows every day. Unless something changes the hope for survival is growing increasingly low. In fact, the lack of aid sent to Africa in light of the Ebola outbreak has led many of the people in the region to abandon all trust in Western relief efforts. Because of this, other disease prevention methods such as quarantining and family screening are becoming harder to employ in the area [5]. As Jon Cohen of Science Mag said, “the containment measures that worked in the past clearly have failed. This has spurred hopes that biomedical countermeasures, such as vaccines can help save lives and slow spread” [4].  Therefore, it is increasingly evident that a need for effective, affordable, and simply attainable vaccines is provided to the region. However, companies will have to either redefine their entire business models or find some other method for acquiring the necessary funds to provide enough treatment.

This is where the influence of a third party, such as the American government, would be of great use. Without the monetary incentives to produce vaccines, companies like Pfizer are not likely to reallocate their resources any time soon. However, if the government provided monetary aid, such as tax breaks, this would incentivize companies and increase vaccine development [6]. Currently, a bill moving through Congress could give the U.S. Department of Health’s Biomedical Advanced Research and Development Authority (BARDA) $58 million for Ebola vaccines and treatment [4]. Similar efforts could improve the outlook for future vaccine development, cultivating a positive outlook for the fight against global disease. Instead of blaming the pharmaceutical companies, one must recognize that these businesses could be the saviors of millions of lives if provided with monetary incentive to stymie the disease’s spread. Therefore, it’s time for more efforts like the Congressional bill mentioned above to be enacted and we as a people need to call upon our representatives to take a stand for human rights.

References:

[1] Offit, Paul. “Why Are Pharmaceutical Companies Gradually Abandoning Vaccines?” Health Affairs 24, no. 3 (2005): 622-30.

[2] “How Drugs Are Developed and Approved.” U.S. Food and Drug Administration. October 23, 2014. Accessed October 26, 2014.

[3] Chen, Michelle. “Patents Against People: How Drug Companies Price Patients out of Survival.” Dissent Magazine. January 1, 2013. Accessed October 6, 2014.

[4] Cohen, Jon. “Ebola Vaccine: Little and Late.” Science Mag. September 14, 2014. Accessed October 6, 2014.

[5] Pollack, Andrew. “Ebola Drug Could Save a Few Lives. But Whose?” The New York Times. August 8, 2014. Accessed October 6, 2014.

[6] Kerridge, Ian, and Lyn Gilbert. “Epidemic Ethics: Four Lessons from the Current Ebola Outbreak.” The Conversation. August 25, 2014. Accessed October 6, 2014.

[7] “Achievements in Public Health, 1900-1999: Control of Infectious Diseases.” Centers for Disease Control and Prevention. July 30, 1999. Accessed October 6, 2014.

 

Brooks Marshall is a freshman Civil Engineering and Economics double major at Johns Hopkins University, interested in finding the balance between science and business to better market the remarkable discoveries and products made on a daily basis. Follow The Triple Helix Online on Twitter and join us on Facebook.

 

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  • CJ

    fascinating! great insight and perspective.

  • Jacque

    Interesting article!

  • Claire Lenz

    great job!!