Brooke Nelson – Within the United States capitalistic economy, large industries have taken root and flourished due in part to competition and minimal regulation. One of those industries, colloquially referred to as “Big Pharma,” is continually referenced in the media for both good and bad reasons. “Big Pharma” is the term used to describe many pharmaceutical companies that are influential, both politically and socially. Some of the key players (aka multi-billion dollar companies) are Johnson & Johnson, Pfizer, and Novartis. Additionally, Big Pharma is not exclusive; smaller firms that have developed niche medicines are included under the umbrella as well. While not nearly an exhaustive list or explanation of the companies within Big Pharma, it is clear that many of these companies have no shortage of funds. However, part of that large growth in net worth may be due to the recent egregious price hikes that some companies have attempted to defend.
For example, one company, Nostrum Laboratories, decided to drastically raise the price of a particular drug, nitrofurantoin. This medicine is listed as “essential” by the World Health Organization for lower urinary tract infections. The World Health Organization clarifies that drugs in this top category are “antibiotics that should be widely available, affordable and quality-assured.” Despite this classification, Nostrum Laboratories raised the price of this medicine from around $500 per bottle to around $2,300 per bottle. Basically, it was a 400% price increase on an essential medicine, unlikely to still be considered “affordable.”
In defense of his company’s actions, Nirmal Mulye (the founder and president of the company) stated that he thought it was a “moral requirement” to make money when possible and to sell the drug for the highest amount people would pay for it. He claims to have been misquoted, yet he responded with the statement “[i]s it moral for me to lose money?” He has been scorched in the media (from news articles to tweets from the head of the US Food and Drug Administration) for his statements and actions, but there seems to be very little, if any, change that can be forced. In the end, the true effects will be felt by people in the public that need this medicine. Also, realistically, because it is an essential medicine, is there any limit as to what people would pay for it, if this was their only option to become healthy again?
Yes, the United States is a capitalist economy, but there are bounds on capitalism that come in the form of regulations. For example, the securities industry is largely regulated by the Securities Exchange Commission (“SEC”). The SEC was created to both protect investors and insure that the markets remain efficient and fair. So, while the SEC may impose many regulations, it increases public trust in the industry, which facilitates higher involvement in the industry. The same idea could be applied to the Big Pharma industry. More regulation should be placed, at the bare minimum, on essential medicines in order to increase public trust in the industry. That public trust would feed the market (similar to its effect in the securities market) and allow for more innovation and growth.
People do not choose to need these drugs. Often, when healthcare providers prescribe a particular drug, people are wary to look for an equivalent due largely to lack of knowledge, fear, or a belief that a different drug will not work as well. In the present, the most society can do is to talk to their health care provider or do research on their own to attempt to circumvent companies attempting to price gouge medicine.
Of course, companies that research and develop these drugs should be fairly compensated for their hard work; it is no small feat to create some of these ground-breaking drugs. Without proper compensation and payoff, the pharmaceutical industry’s medical innovation in the United States may seriously deteriorate or stagnate. While I am not suggesting socialized healthcare (which has not worked in a number of countries) there is a possibility of embracing some sort of compassionate capitalism within the Big Pharma industry. However, what that notion means, or entails, I don’t pretend to have an answer to.
