Indeed, pharmaceutical companies spend a lot of resources and time in the research and development of drugs, but they need to be bound by ethical considerations when deciding on the price to charge. In the case of Mr. Shrekeli, he decided to hike the price of a drug, Daraprim, by 5500 percent at Turing Pharmaceuticals (Mangan, 2018). The hike in the price attracted a lot of media attention, as well as uproar from the general public, and clearly, it was not only unethical but also illegal to do so.
Pharmaceutical companies need to operate within specific guidelines when deliberating on the price to charge for various drugs. They need to offset the cost of research, and earn profit to run their operations, but they need to set reasonable, just, and fair prices (Rahim, 2019). The government also has a great role in monitoring and controlling the activities of pharmaceutical companies. Firstly, they need to audit the operations of these companies, especially to establish the cost of research and development of drugs. The use of this strategy ensures transparency so that the companies do not exaggerate the cost of research and development. Afterwards, the government can then set an acceptable limit of pricing based on the costs.
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The government does not only have the role of monitoring the activities of pharmaceutical companies, but also initiating legal action for the companies that breach the various regulations. Defining the consequences for breach can help reinforce various values and ethics that guide the operations of pharmaceutical companies (Hooper, 2018). On the other hand, if the companies are allowed to operate autonomously without any consequences for their actions, they could probably set prices at their own liberty, which could be exploitative. Therefore, the government needs to curb the companies’ activities and create various restrictions.
References
Hooper, C. L. (2018). Pharmaceuticals: economics and regulation. The concise encyclopedia of economics , 388-392. https://www.econlib.org/library/Enc/PharmaceuticalsEconomicsandRegulation.html
Mangan, D. (2018). ‘Pharma bro’ Martin Shkreli sentenced to 7 years in prison — says, ‘This is my fault’. CNBC . https://www.cnbc.com/2018/03/09/pharma-bro-martin-shkreli-sentenced-to-7-years-in-prison.html
Rahim, M. (2019). Social Responsibilities of the Global Pharmaceuticals Companies: Towards an Ethical Health Care Paradigm. https://www.researchgate.net/publication/335058518_Social_Responsibilities_of_the_Global_Pharmaceutical_Companies_Towards_an_Ethical_Health_Care_Paradigm
