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Why are Ethics Important in Pharmaceutical Business?
Pharmaceutical Industry is different from other industries in many respects. However, the question of ethics is not raised so consistently in other industries. More recently, corporate responsibility, sustainability, impact on climate have come under focus, but not ethics.
The most critical difference is its relationship to life, ailments, diseases, disabilities, and death. Let us see why ethics must remain integral to pharmaceutical business.
- Diseases must have been around since the humans began. These were recognized also as a disruption to normal life that needed to be treated. Trials and errors taught human beings to use various plants, their seeds, barks, and fruits for treatment of ailments as these afflicted an individual.
- Complex diseases were either not there for a long time or were not recognized. Patients died, God’s Will.
- As the body of knowledge grew, so did the knowledge about diseases and their treatment. Detailed descriptions, pictures, and possible treatments were documented.
- During the last couple of centuries, huge developments took place in the field of chemistry. New chemicals were discovered and synthesized. Chemical compounds as drugs were also used and due to their quick effect and dramatic results, these became standard of medical treatment. No one focused on side effects because the treatments were so revolutionized.
- More and more chemical companies entered the business of developing pharmaceutical drugs. Most well-known pharma companies of today, started as chemical companies.
- Chemical business remained unregulated for decades in general and for drugs also. Disasters like Thalidomide during middle of last century forced the health authorities, regulators, and physicians to consider placing checks to prevent such things from happening again. New rules were formed, stricter investigations were introduced, documentation was improved, and is continuing as more aspects unfold.
- The question of ethics also became very relevant when it became known that Thalidomide manufacturer knew about the serious side effect but did not report to the health authorities while registering the drug. Several more such instances compelled the regulators to demand more transparency.
- In a capitalist society, which almost all countries are now, the sole purpose of business is to earn profit. Creating, increasing, and sustaining shareholders value is the primary mandate of all CEOs. Family businesses follow the same principle, even more ruthlessly, because their accounts are not made public. It can happen very easily that profit shall be put before patients’ interest, and it happens frequently.
- Pharmaceutical businesses often ask why they should be held to a higher standard than those in other industries; after all, it is also business. Just because they are serving the public good, should they sacrifice profitability? The answer is that they should earn profit but with responsibility and in ethical manner.
Availability of drugs presents three possible avenues for exploitation.
- Rising research costs, huge revenues, and the clout of Big Pharma has led to concentration of most research products with few companies. They research, acquire rights, and acquire whole companies to increase their basket of monopoly drugs. This forces the health authorities to accept their demands. COVID19 vaccines are a glaring example in which Pfizer particularly exploited all governments and made billions of dollars. Threats to cut down supplies were frequently made and exercised.
- For several years, pharmaceutical research companies have come up in the US and Europe, who are small and agile and focused on drug discovery. They would discover interesting molecules, do the basic work initially, and then sell the rights to bigger companies. This mechanism has further perpetuated the hegemony of Big Pharma. It is a vicious cycle; Big Pharma acquire new products, earn more revenue and profits, and become bigger, and more powerful and resourceful to have more new products. Patients are now dependent on few suppliers for most drugs. Thanks to generic drugs, the patients are able to get routine drugs at least.
- Orphan drugs are a category of drugs which are meant for rare diseases. These are used in small quantities and may not be very profitable. Only richer, larger companies can keep these available, more as a service. If they don’t, the patients shall not have any choice.
Drug availability issue is not just a scare, it keeps happening. In Pakistan, orphan drugs like thyroxine, phenobarbitone are always in short supply.
Another big ethical area is how much should be the price of drugs, what kind of profit the companies should make, and so on.
- In the US and Europe, and many other countries drug prices are not controlled. However, in most countries, drug prices are regulated, and fortunately for the patients. The health authorities fix the prices and any subsequent increases. 2015 case of Turing Pharmaceuticals USA, which was acquired by Martin Shkreli became notorious world over. He raised the price of old drug Daraprim from $13 to $750 in one go and refused to budge despite national outcry. Price control prevents such outrageous acts.
- There is a constant struggle between pharma companies and regulators about pricing. The companies keep submitting appeals and applications for price increases. At times, they also threaten to stop drug supplies, which they do not exercise finally.
- Pricing is the key to profitability though there are several other avenues for profit making. The companies keep pursuing the regulators to get relief in duties and taxes to maximize profit. The tussle goes on with either party giving occasional relief to the other.
- Another area of profitability is compromise on drug quality. It can come in various forms, most common being the use of cheaper materials from dubious sources. Though it is claimed that the materials comply with the prescribed pharmacopeias, but there are finer differences which ultimately affect quality of the finished product.
- Manufacturing plants’ condition also contributes to the quality of drugs. Old, worn out, outdated machines cannot ensure consistent quality. In Pakistan and many other countries, many plants do not comply with the GMP requirements, but these are licensed and continue functioning.
- Quality parameters have become much more elaborate, precise, and stringent. Following those costs money and circumventing these will save money; an act done by many pharma companies in routine.
Ethical consideration is therefore needed in Pharma business. Laws are there for all crimes, but the crime has not gone down, rather it keeps increasing. Laws alone shall not save the patients; ethical thinking is more likely to help.
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