Reference no: EM132841805

Daraprim Price Hike In 2015, Turing Pharmaceuticals purchased the American marketing rights to Daraprim, the branded version of the drug known generically as pyrimethamine. The drug is on the World Health Organization's List of Essential Medicines because it is used to treat the parasite infection toxoplasmosis, malaria, and is often used for people with compromised immune systems, including AIDS patients, as well as some cancer patients and elderly patients. After Turing purchased the rights to Daraprim, the company increased the price from $13.50 per tablet to $750 per tablet, raising the annual cost of treatment for some patients to hundreds of thousands of dollars.

The price increase sparked widespread criticism. The Infectious Diseases Society of America and the HIV Medicine Association sent a joint letter to Turing, claiming the increase to be "unjustifiable for the medically vulnerable patient population" and "unsustainable for the health care system." Dr. Judith Aberg, of the Icahn School of Medicine at Mount Sinai, said that Daraprim will be too expensive for hospitals to keep in stock and that use of the drug would require special review, possibly forcing hospitals to seek "alternative therapies that may not have the same efficacy." She stated, "This seems to be all profit-driven for somebody," adding, "I just think it's a very dangerous process."

Turing founder and CEO Martin Shkreli, a former hedge-fund manager, defended the price increase. He claimed that many patients use Daraprim for less than a year, bringing the price more in line with other drugs for rare diseases. Shkreli stated, "Daraprim is 0.01 percent of healthcare costs in the U.S.," and promised that Turing would negotiate volume discounts for hospitals. He also claimed that a tablet would only cost $1 for patients without insurance. He noted, "I'm like Robin Hood... I'm taking Walmart's money and doing research for diseases no one cares about." He claimed that the money from profits would be used to develop new and better drugs.

Dr. Wendy Armstrong, professor of infectious diseases at Emory University, said in response, "An old drug is not necessarily a bad drug... This happens to be an incredibly effective drug and has been cheap and well tolerated by patients for years." Armstrong and Aberg both noted that some patients who take Daraprim must use the drug indefinitely. Writing for Bloomberg and The Washington Post, Max Nisen described how the price increase was indicative of larger issues in the pharmaceutical industry. He stated, "Old medicines are still sold at inflated prices because there's no mechanism to compel drugmakers to lower them." Nisen added that pharmaceutical companies "justify drug prices by reminding the public that developing drugs is costly and failure-prone. That's a fair point. But drug companies also announced more than $50 billion worth of share buybacks and dividend hikes after the new [2017] tax-cut law passed."

In 2018, Shkreli was sentenced to seven years in prison for defrauding investors of $10 million. But as Nisen points out, "Shkreli's fraud conviction stemmed from his hedge-fund days -- everything he did with drug prices remains legal." In May 2018, the price of Daraprim remains $750 per pill.

Concept: Rationalizations and Causing Harm

Ethical Insight: When Turing Pharmaceutical's CEO Martin Shkreli raised the price of Daraprim from $13.50 to $750 overnight, many were outraged by this price gouging. Shkreli rationalized that he was a "Robin Hood" and the money would go toward research of new and better drugs. But he seemed to convince no one but himself. The notion that Turing might take the profits from Daraprim to do research and development to create new drugs did not seem an adequate explanation for a 5,000% price rise.

Doctors decried that raising the price would only cause harm, noting that some patients remain on Daraprim for life. Daraprim is used by doctors and in hospitals around the world to treat the parasite infection toxoplasmosis, malaria, and for people with compromised immune systems, including AIDS patients, some cancer patients, and elderly patients. Moreover, those within and outside the medical community claimed that the drug's drastic price increase seemed motivated purely by greed.

White's Biblical Principles

First, there is the guideline of a "just weight" as found in Deuteronomy 25:13-15. The principle of a just weight is to give a full amount in exchange for a fair payment. Another way to look at it is to give full quality for what is paid for and according to what is advertised. You must accept responsibility for both the quality and the amount of your product or service. As a business owner, do you fairly represent your product or service? As an employee, do you give a full day's work for a full day's pay? Remember, as it says in Colossians 3:23, you are working for the Lord and not for men.

Second, the Lord demands our "total honesty." Ephesians 4:25 calls upon you to speak the truth. Jerry White reminds you that "Although you will frequently fail, our intent must be total honesty with our employer, our co-worker, our employees, and our customers" (p. 65). This is a difficult principle to adhere to. James 3:2 says this is where you often fail, but if you can control your tongue, you will be able to control the rest of your body as well. The Living Bible sums it up best in Romans 12:17, which says, "Do things in such a way that everyone can see you are honest clear through." You must ask yourself: Are you totally honest in reporting your use of time, money, and accomplishments?

The third principle is "being a servant." Someone has said Christians like to be called servants, but don't appreciate being treated like servants. To serve God sounds glorious, but to serve others is another matter. As usual, Jesus Christ is our example. Matthew 20:28 says that Christ did not come to be served, but to serve others - in fact, to give up his life for others. The value of a business is its service. How well it serves the needs of its customers will determine its success. The business, in turn, is composed of people who must do the serving. The value of the employees is in how well they serve the customer's needs. This is putting the needs of others before your own and then trusting God to meet your needs in the process.

The fourth guideline is "personal responsibility." You must take full responsibility for your own actions and decisions. You should not try to excuse your actions based on pressure from within your business or organization to do what you know is not right. We all fail at times to do what we know we should do. You must then accept the responsibility for what you have said or done and not try to pass that responsibility on to someone else or try to blame it on some set of circumstances. Romans 12:2 warns us about the danger of allowing the world to shape us into its mold.

Finally, there is the issue of "reasonable profits." This principle is quite a bit harder to get a handle on, but it is still vital to look for guidelines. What is a "reasonable" profit? This is something each person has to deal with on his own. Luke 6:31 is a great help on this. It says that you should treat others the same way you would want to be treated. Put yourself in the other person's shoes and ask yourself how you would want to be treated in a particular situation. To the business person, this is the price of the service or product above cost. To employees, it is the amount of their wages for service to the organization. Luke 3:14 says to be content with our wages, but the Bible also reminds the employer in 1 Timothy 5:18 that the laborer is worthy of his wages.

It is all too easy to rationalize your way around many of these principles, but God will hold us accountable in the end. Ultimately it is God whom you serve and to whom you must give an account.

White, J. (1978). Honesty, morality & conscience. Colorado Springs, CO: Nav Press.

-Evaluate the ethical and legal challenges of the article using White's five biblical business ethics principles discussed in this workshop. Which biblical principle, if any, does each ethical or legal challenge violate? Provide a detailed evaluation that demonstrates clear, insightful critical thinking.