Proposal
Proposal
Taxoplasmosis a type of health condition in which the drug Daraprim is used to reduce. Turing Phamarceutical Company is the company that has bought the Daraprim drug and has hiked the prices to the highest margin. Martin Shkreli is the C.E.O of Turing who has attempted to explain and support the decision of the company to exorbitantly hike the prices of the much needed drug by patients and medical facilities. The controversial issue in this paper is the exorbitant increase of the Daraprim drug from $13.50 to $750 by Turing Phamarceuticals.
Introduction
There are a number of controversial issues that come up in the line of business. This is because the interaction between humans and the business environment is highly dynamic and it demands change. It means that change has to focus on both ends of the business in order to effectively serve both parties. There are instances when the rules and principles of operation are broken. This leads to controversy as one party may tend to gain more from the other. At this instances, the values and ethics of life have to apply and in order to achieve the uniformity required, stakeholders have to be considerate.
The business world has seen a new set of controversy brought by a drug company Turing Pharmaceuticals. The company after acquiring a taxoplasmosis drug has raised its current price from $13.50 to $750 on a tablet. The outcry has been felt from the doctors and patients who have seen the drug exist in the market for more than 6o years. The increase of the price from a market price of $13 to $750 is termed as exorbitant. Justifying the reasons for this kind of act can require rocket science.
Considering that the drug Daraprim is relied on by a number of vulnerable patients. It is unethical for the price to be increased by 5,000 percent and this is done not in consideration of the plight of the consumers. Martin Shkreli the C.E.O of Turing insists that the price increase is meant to make the drug even better and more so benefit every stakeholder involved in its making. The action and the sentiments have angered a number of people and this has forced the company to back down on the claims. It is an unfair move to hike prices of a drug that the vulnerable depend on.
This is beyond exploitation and it can be seen as a move to phase out a certain population. Daraprim is a vital drug to people with the taxoplasmosis condition, the drug sustains their life and it means that any increase in the price leads to increase in the maintenance of this condition. This may be detrimental to their health if they can’t afford medication due to this price hike. Important ethics have been skipped in this move by the company, it has gone against the utilitarianism theory that suggests that it is right to protect the rights of many people.
This situation means that Turing Phamarceutical Company has gone against the ethics of life. It has proposed to benefit the few stakeholders in the company and overlook the most important part of the business. Even though the move is meant to improve the business sense of the drug, it does not make any ethical sense and this is wrong on the first go. Putting the interests of a few at the expense of the majority is not fair. This is because the science of numbers tells us that the majority have much to lose since they represent a bigger portion of the society. It is therefore important to consider others before taking an action that will affect them negatively.
The price increase should also be seen as an indicator of an impending failure in the drugs industry. This is to mean that the cost of producing drugs should also be considered significantly to this case of drug increase. The current controversy has to provide light to the way forward on the production and pricing of drugs. Shkreli’s position cannot be understood if all that is done is to criticize his actions. The message that is being communicated in this situation is that the cost of producing drugs is high. There are no mechanisms to gain back the money that should encourage the stakeholders to continue with the venture.
The drug producing industry may be in jeopardy due to lack of profits which affect the motivation of the producers. The lack of motivation for the producers leads directly to an absence of drugs in the market and the effects are unimaginable. Therefore as much as Shkreli is criticized for hiking the prices of medicine, he might be working to protect the patients themselves. His actions could be ill-timed or rather there was need for consultation and prior information before the action could be taken.
The main problem in this kind of price hike is the amount of the increase. This amount explains a lot about profits rather than helping the industry to sustain its operations. Since the pharmaceutical company had bought the drug, there was need to study the production costs as well as the market presence for the drug. This way, the price and its effective factors would have been known so as to be included in the profits. This seems to not be the case since the price hike has been done in an abnormal margin. This was bound to raise attention as the figure speaks a lot about personal ego and self-worth.
The C.E.O tended to explain that the stakeholders also have to make a profit. This is true in the business sense and considering the company had acquired the drug from a different company it is sensible. The margin of the price is the only factor that has to be considered because it is bound to change the way health care is provided and its affordability. The vulnerability of the patients will increase as medical services depending on this drug will be scrapped. This leaves the patients in a desperate position requiring them to look for alternatives that Turing knows are not available.
Turing understands that there are no alternative medication for this condition or replacement for the drug. This is viewed as a skim to defraud patients who have no otherwise but to keep up with the pace of price hike. The knowledge that health facilities and patients depend on the drug and they must pay the price gave Turing the mandate to hike the price. The move is seen to exceptionally increase the profits of the company in a major way.
Martin Skhreli insists that the above board prices are projected to help the company look for an alternative medicine through research from the profits. This is exploitation of the highest order that is proposed to be nipped before it paralyses health facility services. It is not logical to plan for research and put the burden on profits of the company by selling the main drug to acquire funding for the research. The case of research and the funding comes from grants, proposal to stakeholders, the government and even loans.
The act to increase prices on a drug so as to help initiate an alternative drug is a crooked idea. What does it mean to the main drug when the alternative is produced, will it reduce the price or will it be phased out of the market? The steps taken in this situation are not logical and the most probable method is to look for funding in order to support research of the drug. This is because looking at the logistics of research and producing medicine requires time and resources. The least amount is five years to conduct research and come up with a prototype. The other dilemma is handling tests. It means that the patients who can’t afford the current market price will have to wait for more than 8 years to get a proposed alternative.
The market is the most important part of the business. This is because they guarantee the financing of more processes for the producers. Let us take for example the Daraprim drug becomes unaffordable to the market and therefore the patients succumb to the condition. This will mean that Turing Pharmaceutical will lose its market base and therefore has to close shop or find an alternative venture in order to continue being relevant. It is also illogical to take this route where people have to be devastated just because the prices of medicine have to fulfil huge profits for the few stakeholders.
There is a lot that should be put into consideration in this situation. This is in a bid to save both parties from languishing in the greed of the other. This is to mean that the two parties need to be logical and consider the positions of one another. Turing Phamarceutical should ensure that patients and medical facilities continue stocking Daraprim for the good of the health of the patients and medical services and also provide an environment for the company to produce the drug and make profits for the stakeholders.
This can be fashioned out by studying the highs and lows involved in drug producing especially on effectiveness and the cost implications. This way, the company and its stakeholders will be encouraged to produce the drug and the patients will not strain to get access to it. The win-win situation cannot be equal but it serves the purpose in order to consider the ethics of serving the majority rather than elevating profits for the few while the majority have to languish in order to quench their medical thirst.
The earlier decision was therefore deemed unjustifiable by the population of the patients and the medical facilities. This situation shows that the most affected people are the large population of patients and a number of medical practitioners. Therefore the company has to look again into their policies in order to ensure that the stakeholders are not the only ones benefiting from the deal of producing the drug. First the patient population has to benefit since the drug is made to solve their health problems before profit making.
There is a major problem in this field of drug producing if solutions to this problem will not be proposed or effected. This is because there will be more cases of drug price hike therefore a lasting solution has to be proposed and effected in the near future. There should be a meeting held by the health practitioners, the medicine producers and the consumers. This meeting should be aimed to produce a lasting solution to the dilemma of medical prices that keep skyrocketing due to the freedom of price in the field.
The meeting should close out the ability of producers to hike prices at their own discretion. It means that there should be a stipulation of the policies to be held and rules to guide the industry of producing drugs so as to curb the rogue agents who wake up to satisfy their profit making egos. It means that transparency will have to be up held. Transparency should base on the credibility of the drug which means that research information and results has to be shared for the users to know the effectiveness of the drug and any side effects or complications associated with it.
The timing of hiking should be long term and it should be in line with the economics of production. It means before the prices of medicine are hiked, the costs involved in production have to be factored in beforehand. This will enable the company to know the amount of money and other resources invested in the production of the medicine. These cost implications will then be factored into the prices of the medicine and communicated before the drug is sold into the market. The rate and consistency of communication should be constant and the stakeholders that are affected have to be made aware before any plans to hike the prices.
A commission should be formed by the government to check into the practices of medicine producers. This means that the actions of the drug producing companies will have to be vetted and approved by the commission agency in order to determine the working of the companies. This will curb on compromise of drug quality which may endanger the population. The decision to compromise on the quality of drug produced may come from rogue producers who are out to take advantage of the available market. They have to be checked in order to protect the people as well as the industry.
Medicine companies should be on a high alert. This is in the order to protect the industry in which they operate. The companies should be able to monitor the activities of each other in the form to improve quality of the drugs, the industry and avoid bad practices. The initiative should be pushed by the companies as a way of taking care of the society. This can be an act of corporate social responsibility (CSR) which is aimed to increase the trust of the customers in the company. Actions aimed to improve the lives of the clients by the corporates works to benefit both parties. It means that whenever the drug companies decide to regulate each other for the benefit to provide elite services for the clients, the clients tend to trust the companies.
Trust from the clients is important for business for the companies. It means that the companies will get to sell their products to the clients at an increased quantity due to the client number. This in the end will lead to higher returns in profits for the companies. It is because the more a company sells it commodities, it is the more it benefits through profits. Increased rates of selling will therefore ensure that profits are accrued at a faster rate. This will improve the quality of production as well as the welfare of the stakeholders.
Consequences
The need to have transparency in the financial implications of producing drugs will determine the continuity of the business. This is because the consumers will be aware of the amount they have to pay in order to enable the companies to keep producing drugs for them. There is also a high tendency of the companies getting more investors especially when the business makes sense in terms of the profits.
Transparency in terms of operating costs will give the company an easy time in dealing with price hikes. It means that whenever the costs of production go up, the consumers will have to pay an extra for the costs. The purpose is to ensure that both parties benefit from this deal which is to produce drugs for the various diseases and make profit from doing the same. The moment where profits have to be extremely high the consumers and producers can negotiate on the prices so as not to hurt each other which is termed as exploitation.
The agencies put up by the government will help to curb the behavior of rogue medicine producers. This is because the agency will be on the lookout to highlight wrong practices in the industry and flag them down. This are the methods to ensure that the drug producing companies are regulated and they have to consider a step by step decision before they succumb the consumer to obligations that are unaffordable. This means that the agency will act as a watchdog and it will also act as a resource center for the drug producing companies as well as the clients on matters that affect drug production and even supply.
The agency will act as a communication channel for the medicine producing companies and the government. This is in the case that any clarification has to be made, funds for research are needed or an introduction of a new drug has to be made then the agency will relay the information. This way, the government will be able to understand the activities of the medicine industry and provide the necessary measures so as to avoid conflicts between the producers and the consumers.
The ability of the medicine companies to watch and regulate each other is important. This is because they are on a competing edge and any malpractice will mean that the particular company surpasses the other. This will encourage the companies to work diligently for the good of their results. It is also noted that the culprit C.E.O was arrested and resigned from the company. This tended to help the patients as the prices of the medicine was reduced. The company is now investing on the production of toxoplasmosis which is a step towards saving the lives of the patients.
Awareness should be propagated over the issue of price hikes. It is illegal and the consumers should know that it is their right to protest. Hiking of prices for essential commodities tend to affect the consumer as well as the economy since there will be reduced transactions on the commodity. Therefore, it is important for the government to ensure that the consumers and the producers are aware of the policies and laws that affect their business transactions.
References
Beck, J. (2015, September 22). The Drug with a 5,000 Percent Markup. Retrieved from The Atlantic: http://www.theatlantic.com/health/archive/2015/09/daraprim-turing-pharmaceuticals-martin-shkreli/406546/
David, F. (2015, September 20). Pharma CEOs Should Take a Stand on Egregious Price Increase - but They Wont. Retrieved from Forbes: http://www.forbes.com/sites/frankdavid/2015/09/20/why-pharma-companies-should-take-a-stand-on-turings-drug-pricing-and-why-they-probably-wont/#3920d3f44103
Exploring. (2014). Exploring Business. Washington: Saylor Foundation.
Walters, J. (2015, September 22). Martin Shkreli: Entrepreneur Defends Decision to Raise Price of Life-Saving Drug 50-Fold. Retrieved from TheGuardian: http://www.theguardian.com/business/2015/sep/21/entrepreneur-defends-raise-price-daraprim-drug
Zarolli, J. (2105, September 26). Turing Pharmaceuticals Retreats from Plan to Raise Price of Daraprim. Retrieved from NPR: http://www.npr.org/2015/09/23/442907028/turing-pharmaceuticals-retreats-from-plan-to-raise-price-of-daraprim
