Price Gouging in the Pharmaceutical Industry

Price gouging has become a common feature in the pharmaceutical industry. Marathon and Turing companies recently raised the prices of important prescription drugs with 6% (Herper, 2017). The price increases by the two companies are legal. Marathon Pharmaceuticals raised the price for Emflaza, a steroid that has never been approved in the United States. As such, the Food and Drug Administration considered the steroid a new drug and Marathon Pharmaceuticals had to go through the process of getting it approved. Drug production uses a pipeline system where companies develop a large portfolio of potential compounds and eliminate the products that are not viable through their production process. Although the use of a number of candidates increases the likelihood of creating a fiscally rewarding drug, it is an expensive process. It is estimated that it costs about $2.6 billion to create a new drug and introduce it to the market successfully (Herper, 2017). Therefore, in an attempt to recover the costs of inventing a new drug, it is legal for the pharmaceutical companies to raise the prices.

Ethics and American Values

            Price gouging for essential pharmaceutical products is unethical. The drugs whose prices were raised are used to treat life-threatening conditions which raise the individual and organizational cost of treatment. The American values of capitalism, free markets and innovation cannot exceed the value for the life of individuals. All organizations must respect the life of Americans and work to improve the standards of living before seeking to make any profits. Moreover, pharmaceutical products exist to improve the living conditions of the people and they must seek to accomplish this vision first before making profits.

References

Herper, M. (2017, February 10). Why did that drug price increase 6,000? It is the law. Retrieved from https://www.forbes.com/sites/matthewherper/2017/02/10/a-6000-price-hike-should-give-drug-companies-a-disgusting-sense-of-deja-vu/#11e91dc371f5