The Hippocratic Oath (wrongly attributed to Hippocrates) is one of the most famously known Greek medical texts, required to be sworn on by all beginning practicing physicians. It entitles physicians to uphold specific established ethical standards. It reflects the values the medical profession wishes to stand for together with what they believe society wishes of them. Not all junior doctors do it, it’s not mandatory; they often state that ethics does not need to be sworn. Ethics is something every human being grows and develops and that it doesn’t affect the real commitment to serving the best interests of their patients. Nonetheless, business ethics in other industries seem to quarrel with this statement. When a patient has a particular problem, the physician judges his or her actions based on clinical evaluations. Signs and symptoms are interpreted and deciphered, a disease or a syndrome is identified and an individualized treatment proposal is made. No treatment at all may be the best decision to be made. This is what is expected of the healthcare professional. No question and no doubt about it. However, is that what is expected from all other professionals? I once met an auto repair shop owner that would secretly further damage a car to charge extra from the insurance company in repairs. In another instance, my water heater at home broke down. I had to call a repair company to come and do the diagnosis and possibly repair it. The worker came and after a quick look he offered to replace the damaged part with a new one and suggested me a costly solution. I had no option but to accept it. I came to know later, from another repair guy, that that piece of equipment was never replaced. In fact, he had taken advantage of his informed and privileged position to charge me and advise me wrong. Milton Friedman once wrote: “the social responsibility of business is to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud”. Accordingly, a business owner is obliged to follow this creed if he aims to be successful. So, does the absence of an oath frees non-doctors to act without ethics, without a common goal of a greater good, or of the welfare and well-being of the community? If ethical theories are to be useful in practice, they need to affect the way human beings behave and to have business serve long-term social values.
In 2015 the company Positech Games launched the game Big Pharma. Big pharma is the pejorative name critics of the industry often give to the pharmaceutical industry. Game mechanics were simple: we play the part of a pharmaceutical company manager that produces prescription drugs from raw materials that can be combined with different positive and negative traits in order to build the most powerful drug possible for a given disease or effect. The player must also manage an assembly line (with various equipment) in order to finally prepare the material in pill form for delivery. One can add more processing units, building space and get evaluations. The drug is then sold on the game’s virtual market and a profit must be made in order to build additional lines and ultimately become a successful manager. There are competing companies, supply and demand, market analysis, research trees and so on. As far as managing games are concerned, this one seems perfect. It has it all with the pharma background, making it an interesting addition to the strategy games portfolio. The surprise came when the expansion was launched, one year later. It was called “Marketing and Malpractice”, allowing for players to add Executives as part of the company which that could be used to market the drugs as well as to try to manipulate and corner the market. To manipulate and corner the market! You could easily make a profit creating cheap drugs with bad side effects, and incredibly effective drugs might not command a high enough price to be profitable. It is frightening to think how a game can be so close to reality and yet, the reality is even worse. There are some urban myths about how big pharma companies may be withholding the secret to curing cancer or making us sicker with vaccines, and doctors are usually the accomplices. The actual truth is far different and much more subtle and inconspicuous and it happens daily.
It starts with the research but it doesn’t end there. First, industry-sponsored studies are more likely to produce results that flatter the sponsor’s drug. There are innumerous trials favoring a specific drug that hardly have any clinical value. Not only are the trials sponsored by the manufacturers, but the patient numbers may not be significant to draw conclusions and the effect or benefits of the drug becomes exaggerated. Second, unfavorable trial results are usually omitted. A commonplace behavior is to only publish studies that have positive effects. Trials that don’t prove a hypothesis are abandoned early and don’t get to peer-review. The scientific community continues unaware to a particular side-effect or harm of a particular drug or combination of drugs. Third, there’s medical education. Peer-reviewed academic medical papers and magazines harbor the most elevated clinical and research information, resulting from (hopefully) well-designed and well-conducted methodology and research. Strong recommendations result from classifying evidence by its epistemological strength and requiring that only the strongest types (coming from meta-analyses, systematic reviews, and randomized controlled trials) can yield strong recommendations. However, even this form of a library may be corrupted. It is not unheard-of academic journals being owned by a drug company, or a particular paper being written by people who work directly for one, without disclosure. Continuous medical education that goes on in medical events is mostly from industry funding and speakers are invariably in the pay of drug companies — again often undisclosed.
The Pharmaceutical drug market is a billion-dollar industry. The average pay of the 10 top CEOs of big Pharma was about $30 million. In the US alone, total spending on medicine in 2010 was of 887 billion U.S. dollars. It is estimated that by 2022 the pharmaceutical market will increase to over 1.4 trillion U.S. dollars. It is a significant component of the international economy with some of its most critical products. Because pharmaceutical companies stand to profit from the drugs they sell, they have an incentive to influence consumers to buy the drugs they manufacture. These efforts introduce a conflict of interest: between the objective of pharmaceutical companies to maximize profits and the need of patients to receive the safest, effective, and individualized medications at any given time. But in any developed country we expect companies, independent of its industry, to uphold certain ethical practices to benefit its consumers. Pharmaceutical drug companies serve the public good in a particular way, as they manufacture and sell products that are vital for the consumer. In this unique setting where this industry is responsible for people’s health and well-being, shouldn’t the consumers be the company’s greatest priority, instead of profit? Should the pharmaceutical industry be subject of a higher ethical standard because of the nature of its business? In the case of orphan drugs, do pharmaceutical companies have a moral duty to invest in treatment research even if they lose money in the process?
Going back to our Big Pharma, the game. One of the extra features one could buy, later on, was “Martin Shkreli’s Mod”. This extra allowed the manager to increase the price of malaria, AIDS, and HIV medication by about 5,500 percent. In 2015 Turing Pharmaceuticals bought Daraprim, a folic acid antagonist also called pyrimethamine which is the drug that is used to fight off acute malaria or toxoplasmosis (ex. brain infection in a patient with HIV). Soon after acquiring the drug, the price per tablet rose from $13.50 to $750 in a middle of a public media frenzy. Hillary Clinton tweeted that the 5,000% spike was “outrageous” and amounted to “price gouging.” Turing Pharmaceuticals CEO’s Martin Shkreli was to become known as “the most hated man in America”, making him a pariah among patients-rights groups, politicians and hundreds of Twitter users. But this price increase is legal, and although insurers have the option to continue to pay for the drug, they will likely turn to a cheaper, less effective treatment after this price hike. The problem was that there was no similar drug. And Turing Pharmaceuticals was claiming that the profits of the drug would be used to create a better product. Shkreli ended up being accused and charged with securities fraud from other shady business he was conducting, nothing to do with the Daraprim incident. In fact, Turing Pharmaceuticals decided to lower the price to an “affordable level”. Three years have passed and while Shkreli is out of the picture, the drug is now half the price, 375 dollars, to some patients and 750 dollars to others. The former have to go through all sorts of expensive and bureaucratic hurdles to get a drug that can save their lives. The latter still have to pay the 750 dollars per pill. Other companies seem to be following the “Turing playbook”. The pursuit of profits at the expense of patients is becoming a routine in the industry. In 2016 Mylan raised the price of a standard two-pack of EpiPens to $600. The price was $100 back in 2009. Heather Bresch, Mylan’s CEO, is using many of the same arguments that Turing did on Daraprim: complaining about the broken healthcare system in the US, the lack of programs in place to help those with great financial need and saying the company needs profits to fund research. She even got public support from former Turing CEO Shkreli. On one hand, there is some rationale for the positions of big Pharma CEOs that high profits are needed to maintain research and development of new, more advanced medications as well as to earn a fair profit that properly incentivizes them to engage in the difficult research and development that delivers new medicines, like orphan drugs. But drug pricing at many companies no longer reflects research and development expenses, which we know that pharmaceutical companies spend twice as much on marketing and advertising as they do on the research and development of new drugs How much research must a drug like Daraprim need, that was invented more than 50 years ago, as was the EpiPen, in the 1970s? And in many cases, pharma companies haven’t even created the drugs they sell.
In Europe, the prices of medicines are determined not by the manufacturer selling them, but by the government who is paying for them (with the exceptions of Britain and Germany, where manufacturers set affordable prices). Typically, we have higher prices in higher GDP countries and lower prices in lower GDP countries.
Price controls do exist in Europe (and Australia) because those countries believe — unlike phones or cars — the unique aspect of drug prices is if consumers can’t afford the product, they could have worse odds of living or face certain death. The policy identifies the humane element and seems to be an ethical position to take. But is it fair to drug companies to control prices of a product they developed and don’t they have a right to set whatever price the market will bear? However, in the US drug manufacturers run government-protected monopolies and high drug prices are the result of it. The implicit social contract by which this business operates is clear: in return for a free market, drugs should be affordable. The new generation of pharma leaders clearly does not feel compelled to abide by the moral imperative inherent in the ethical drug business, rather pledging their alliance to stockholders, employing pricing strategies designed to maximize profits. There are a few measures being discussed to protect patients from all this harm doing that include revising patent exclusivity ensuring timely generic drug availability, more meaningful price negotiation by governmental payers, more evidence about comparative cost-effectiveness of therapeutic alternatives, and actively educating patients, prescribers, payers, and policymakers about these choices to promote more value-based decision-making, without this being made by the pharma companies themselves.
Ethics and social responsibility are key elements when planning one’s personal life or planning for the success of their business and from a doctor standpoint, I’d wish drugs (or any treatment whatsoever) would be universally accessible to every patient. Just as hospitals have an ethical commitment to treat patients regardless of their ability to pay, pharmaceutical companies also have a similar obligation to ensure those who have a medical necessity for a drug are able to receive it as well as the governments who allow or regulate this specific trading. To have patients with no drugs because they can’t afford it’s morally indefensible. Society, as a whole, must bear the expense of medical treatments that become necessary if patients fail to obtain drugs that could improve their health especially if they feel the cost is prohibitive.
I inquired some of my colleagues on how would they proceed, presented with the Valiant, Turing or Mylan challenge. I offered different sides to the problem, with insights from the different media outlets at the time the news came out. I tried not to be partial. Even though the sample size was small, the results surprised me. Almost, if not all, sided with Valiant, Turing and Mylan, grounding arguments on economics and right-wing policy, free market and so on. As if the economic costs of producing a good would be enough justification to charge whatever price they wanted; 3rd parties who weren’t in need of the good shouldn’t be part of the solution. The social state was doomed to end. These are people who look at the pharma business in a very special way, as they are part of the stakeholders who often end up diagnosing rare disease and eventually prescribing the orphan drugs. And knowing that we feel that everything has a price, that corporate responsibility or corporate ethics comes second to profits.
As Henry Ford once stated, “a business that makes nothing but money is a poor business”. In 2009, Harvard business school graduates started to pledge to an oath they called “The MBA Oath”, a voluntary pledge for graduating MBAs and current MBAs to “create value responsibly and ethically”, in which MBAs are respected for their integrity, professionalism, and leadership. Are we in need to revise our values as leaders? Are we in need of a business ethics oath?