Profits Before Patients?
Now, is this really the case? Or is it just a pathetic allegation and an excuse for people to demonstrate their disliking of having to spend their precious money – even if it’s for something so beneficial to us, something that saves lives – medicine. Therefore I believe that pharmaceutical companies can justify the large sums of money that they charge for their drugs that are cheap to manufacture.
Firstly, besides profits, what other incentives are there for pharmaceutical companies to invest their time, effort and money into researching and developing these miraculous compounds. Exactly, there are none, so why else would firms be willing to produce them? Drugs can take as long as 15 years to develop, from the initial idea all the way to being on the market. Furthermore, this research is extremely expensive – estimates range anywhere between $55 million and $2.6 billion. This is on average, per successful drug, and doesn’t even take into account the fortunes wasted on failed drugs. Therefore the extra prices that these pharmaceutical companies charge, can be seen as a reward for investing so much time, money and effort into research and development.
On the other hand, many believe that these high prices charged for drugs discriminate lower-income families. Prices have been rising and are continuing to rise, becoming more and more unaffordable for families. For example, the world-renowned firm, Valeant Pharmaceuticals, earlier this year bought the rights to two existing heart drugs and immediately raised the selling prices – one drug by 525% and the other by 212%. Profit was the only incentive. We can see from the bar chart that the highest profits are actually in the pharmaceutical industry and the reason for this is due to the massive sums of money charged for their products. Drug prices are becoming very unaffordable for those who really require medical help, and if some of these drugs aren’t available to patients, their lives are being put at risk. This is why many see this as completely immoral – human lives are being sacrificed for profits.
In addition, in countries without universal healthcare and no price restriction mechanism, such as the United States, companies are free to charge as much as they like for their products. Due to intellectual property rights, they are protected and are able to create legal monopolies which allow them to be free to set their own prices. However, the UK is a great example of a country with a price regulation system in terms of medicine. The Pharmaceutical Price Regulation Scheme (PPRS) used by the UK Department of Health, has been implemented to ensure that the NHS has access to quality, branded medicines at reasonable prices (whilst still offering a fair return to producers). Hence, this can be seen as moral as the scheme ensures a balanced deal between NHS patients and pharmaceutical companies.
In conclusion, I believe that it is in fact justifiable for pharmaceutical companies to charge large sums for their products. This is because these companies have to invest time, effort and large sums of money in researching and developing new drugs. As well as this, schemes like the PPRS ensure that the prices charged to the NHS are reasonable and so patients covered by the NHS would pay affordable prices for the medicines they require. Also, with a 12% overall success rate for developing drugs, pharmaceutical companies are forced to waste massive sums of money into research for drugs that don’t even make it to the market and so this can justify the high prices charged. The failure rate in the pharmaceutical industry is high enough that chemists have tried to calculate the chances of working on a drug that actually pans out during their entire career.
I believe that the best solution to this problem would be to increase government funding into the National Institutes of Health (NIH) that conduct the basic research the pharmaceutical industry relies on for its initial ideas. This would lead to more knowledge about diseases and therefore better quality drugs can be produced. The cost of production for drug companies would also decrease, as much of the vital and expensive research that they need has already been carried out for them, allowing them to sell their products at lower prices whilst still ensuring the same profit.