Pyrimethamine, or as it is more commonly known Daraprim, is a prescription medication that has available for nearly seven decades (Pollack, 2015). It is most commonly used for the treatment of malaria and and toxoplasmosis, which is an infection caused by a parasite often found in contaminated food. Between 1953, when it was approved for use by the United States Food and Drug Administration (FDA) and 2014 the price of Daraprim was kept relatively low; ranging from as low U.S. $1 to $13.50 per tablet of the medicine (Pollack, 2015). In 2015, the rights to manufacture Daraprim was bought by a start-up pharmaceutical company called Turing Pharmaceutical. Turing was founded a few years ago by Martin Shkreli, a former hedge fund manager turned entrepreneur. Soon after obtaining the rights to produce Daraprim, Turing raised the price per tablet by over 5,000 percent (Cha, 2015). In others, the price for one tablet went from U.S. $13.50 to approximately U.S. $750.
Applying a business ethics analysis to Shkreli’s decision to suddenly and drastically increase the price of an vital medicine for some of the public does not produce a clear result. On the one hand, from a axiological ethical perspective, Shkreli’s decision is clearly unethical and unresponsible. Under this analysis, Shkreli’s decision breaches the principle that says a business should not take adavantage of customers that have no alternative to its goods or services. In this case, that would be “medically vulnerable patient populations” (Cha, 2015). Under Shkreli’s business strategy for Daraprim; since there were no alternative medicines that could be substituted for Daraprim and as a result of Turing’s ability to control how much of the drug could be distributed, Shkreli was able to force consumers to pay the new price or do without the medicine. To be sure, it would be hard not pay the price, whatever it is, “if you’ll die without it” (Cha, 2015). On the other hand, undet a teleogical ethical anaysis, Shkreli could and has argued while he underestand the concerns of the people the use Daraprim, the fact of the matter is that Daraprim is not used by that many people ad so therefore its price is “more in line with those of other drugs for rare diseaes” (Pollack 2015). At such high prices, other companies would be attracted to develop alternative medicines. That competition would be helpful for patient choice. More importantly, the increase in price will provide Turing with the necessary funds to develop a better medicine than Daraprim as well as; which in the long term is good for the whole world (Pollack, 2015). In essence, Shkreli is saying that the ends result, will justify the price increase.
In addition to a business ethics analysis, Shkerli’s actions can also be examined from a corporate social responsibility perspective. Similarly, such an analysis produces mixed results. For example, from a shareholder value theory point of view, Shkreli’s actions are absolutely reaonable. While Turing in a member of the community, its responsibilities are not focused on taking care of the public but rather maximizing value for its owners (Smith, 2003). Accordingly, Shkreli’s business strategy, is precisely organized and implemented towards accomplishing that task. One could argue, from a purely busness persepctive Shkreli’s plain is nearly perfect. On the other hand, from a corporate citizenship perspective, Shkreli’s actions could not be farther from the ideal of what it means to be a socially responsible corporation. To be sure, the fact of the matter is that some people, on limited budgets will have to pay more for the medicine, which may potentially force them to make unpleasant adjustments in their lives. More drastically, some people will simple not be able to afford the price increase potentially causings them to remain ill or even die. These are issues that no individual or corporation wants to be connected with but Shkreli and Turing do not seem to mind.
References
Cha, A. E. (2015, Sep. 22). CEO who raised price of old pill more than $700 calls journalist a ‘moron’ for asking why. Retrieved from https://www.washingtonpost.com/news/to-your-health/wp/2015/09/21/ceo-of-company-that-raised-the-price-of-old-pill-hundreds-of-dollars-overnight-calls-journalist-a-moron-for-asking-why/
Pollack, A. (2015, Sep. 20). Drug goes from $13.50 a tablet to $750, overnight. Retrieved from http://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-drugs-price-raises-protests.html?_r=0
Smith, H.J. (2003, Summer). The shareholders vs. stakeholders debate. Sloan Management Review, 44.
