Earlier this month, the Food and Drug Administration approved a portable device, Evzio, that counteracts opiate overdoses. Although naloxone, the active ingredient in Evzio, has been used in hospitals for decades, the FDA’s approval allows for more widespread use. Those prescribed Evzio — either for a drug problem or because their condition requires a prescription opiate — can bring the device with them anywhere, increasing their chance of survival in the event of an overdose. FDA approval of Evzio ostensibly increases accessibility to an important antidote to opiate overdoses, presumably saving lives. But the predicted price of Evzio will make the device inaccessible for most and calls into question the ethics of pharmaceutical companies’ practices.
Although government funding enables the initial phases of scientific research, pharmaceutical companies charge outrageously high prices for their products and reap immense profits from those whose tax money catalyzed drug development. In a recent example demonstrating the corporate abuse facilitated by pharmaceutical companies’ unchecked control of the drug market, Gilead Sciences priced a revolutionary hepatitis C medicinal cure at $1,000 per pill. For the six-week course, this price equates to $86,000.
The producers of pharmaceutical drugs seem to sell their products to consumers at prices that fail to reflect the production costs. Granted, in order to maintain financial prosperity, these companies must obtain a certain amount of profit from the medicines they develop. But the amount of money reaped from sales significantly surpasses research costs, as evidenced by Gilead’s first-quarter earnings, which reached $2.3 billion with help from the sales of its hepatitis C drug.
There is no justification for the high prices. Although pharmaceutical companies claim the prices of research and development warrant high prices for their products, the numbers cited misrepresent development costs. The $1 billion widely claimed as the amount to create a drug includes compensation for the developmental failures of other products in addition to the development costs of the successful medicine. However, the current price tags on products generate more than enough revenue to counteract the costs of failed research.
Rather than logically defending the pricing practices, the president of the Pharmaceutical Research and Manufacturers of America was quoted in a recent New York Times article to explain the seemingly unjustifiably high prices. His argument is morally repugnant. John Castellani, the president of this trade group, which represents several of the most prominent pharmaceutical companies in the United States, explained, “their [patients’] lives, in short, will be transformed … you can’t put a price tag on it.” Castellani leaves no question about the ethics of the practices of drug manufacturers — he says producers of the drugs vital to the survival of many can and will exploit their power by pricing their products as high as the market allows.
Due to the lack of a regulatory agency to oversee pricing, and patient reliance on medicine, pharmaceutical companies completely control the market. If a drug producer obtains exclusivity through patent, which often occurs, other companies must wait seven years before creating similar, less expensive versions of the drug. Thus, the original producer sets the price, thereby denying consumers reasonable prices for products intended to improve health problems, not indebt customers.
Undeniably, in a capitalist market, smart business practices that generate the maximum profit enable economic prosperity. But, the drug companies should ultimately reconsider the prioritization of their goals and primarily strive to benefit consumers. In other business sectors, competition between producers forces companies to lower their prices in order to sell their product. While legal restrictions initially prohibit this competition in the drug market, the lack of competitors should not be an invitation to promote financial gain at the expense of consumers. The current practices of pharmaceutical and biotechnology companies are morally indefensible.
Dan Moritz-Rabson is a contributing columnist. Email him at [email protected].
