The efficiency and justifiability of drug pricing in the pharmaceutical industry are exposed to continuous controversy. According to the statistic indications, billions of dollars are invested in pharmaceutical research and the development of the novel medicine. The processes of drug elaboration are costly, and by setting high prices, the enterprises attempt to reimburse these costs and expenses. However, drug pricing is an issue for the majority of consumers and patients with severe health conditions worldwide. People experience difficulties in purchasing medicine that can relieve their pain and save their lives, and it seems that the pharmaceutical companies’ principal motivation is profitability. Therefore, the question of the ethics of drug pricing remains open.
The cancer drugs are the most expensive in the industry. It takes up to $1 billion to bring a drug to market. The research and development processes, clinical trials, advertising of the effective drug comprise millions of dollars. Nowadays, the value of the US Healthcare system is equal to $2.7 trillion. According to the statistics, the US Healthcare system is twice expensive than in European countries.
The heavy expenses for drug production are inevitably reflected in the pricing strategies adopted by the enterprises. Many cases of the exorbitant prices for the drugs from the sole-source generic companies are known. For example, Daraprim, the medicine for the cancer treatment, costs $750 per pill. The drug developer has rapidly increased the price from $13.50 to $750, and its pricing decision is widely criticized. Imprimis Pharmaceuticals, along with many other representatives of the industry, show the immoral and unethical approach towards the business contact by reducing or even excluding the consumer-oriented aspect from the pricing strategies.
While US pharmaceutical enterprises receive up to $800 million of the annual revenues, the patients strive to get access to life-saving drugs. In a relatively short period of time, the prices increased two times, making the drugs even more unapproachable for the people with the average or low-income. Nowadays, the monthly costs for cancer drugs constitute the sum of nearly $10 thousand. Such expenses are unaffordable for the majority of patients. In this way, the exceeding prices frequently induce bankruptcy.
Despite the widespread unethical trend in drug pricing, many of the medical researchers and doctors contribute their time and efforts to fight the current pricing policies and create the opportunities for the patients to purchase the lower-cost drugs. For example, Glaxocline Smith and Novo Nordisk offer up to 90% discounts for drugs in low-income developing countries. It is recognized by the governments worldwide that the biopharmaceutical sector plays a significant role in the economy both on the regional and global scales. Thus, the Chinese government included the evolvement of the local industry in its five-year economic plan, and they intend to invest $1.5 billion for the establishment of new pharmaceutical enterprises. The development of the sector contributes to economic sustainability as well as provokes the positive outcomes in the social and public sectors.
The most reasonable pricing strategy should combine both aspects of financial profitability and the customer-oriented aspect. The frequent cases of the rapid prices increase provoke the public turmoil and judgment, and cannot be considered beneficial for anyone. Therefore, it is important for the society, government, NGO organizations, and the other market’s participants to be involved in the pricing decisions and setting up of the limitations to exceeding drug costs.