Recently, dramatic price increases by several pharmaceutical companies have provoked public outrage. These scandals raise questions both about how pharmaceutical firms should be regulated and about how pharmaceutical executives ethically ought to make pricing decisions when drug prices are largely unregulated. Though there is an extensive literature on the regulatory question, the ethical question has been largely unexplored. This article defends a Kantian approach to the ethics of pharmaceutical pricing in an unregulated market. To the extent possible, pharmaceutical companies must (...) price drugs so that those who genuinely need them can get them without financial ruin. This requirement is an ethical side constraint, like the moral prohibitions on deception and theft, that takes precedence over a business’s interest in maximizing profit. That said, the requirement’s application is sensitive to the need to recoup the costs of research and to produce a return that financially justifies the original investment. It may not be either feasible or desirable for government to attempt to enforce the ethical requirements concerning just pharmaceutical pricing. Either price regulation or subsidy could fulfill government’s obligation to protect patients from being objectionably vulnerable to pricing decisions by private companies. (shrink)

Many people believe that the research-based pharmaceutical industry has a ‘special’ moral obligation to provide lifesaving medications to the needy, either free-of-charge or at a reduced rate relative to the cost of manufacture. In this essay, I argue that we can explain the ubiquitous notion of a special moral obligation as an expression of emotionally charged intuitions involving sacred or protected values and an aversive response to betrayal in an asymmetric trust relationship. I then review the most common arguments used (...) to justify the claim that the pharmaceutical industry has a special moral obligation and show why these justifications fail. Taken together, these conclusions call into question the conventional ideologies that have traditionally animated the debate on whether the pharmaceutical industry has special duties of beneficence and distributive justice with respect to the impoverished in dire need of their products. (shrink)

In the sixteenth and seventeenth centuries, members of the Salamanca School engaged in a sustained and sophisticated discussion of the issue of just prices. This article uses their contribution as a point of departure for a consideration of justice in pricing which will be relevant to current-day circumstances. The key theses of members of this school were that fairness of exchanges should be assessed objectively, that the fair price of an article is one equal to its ‘value’, and that the (...) best indicator of that value is the price that article commonly fetches in an open market. This article tries to bring to light the attractiveness of those views in order to guide current practice by contrasting them with alternative views, showing their connection with intuitively attractive basic standards, and linking them to commonly shared intuitions. (shrink)

Many people believe that the research-based pharmaceutical industry has a ‘special’ moral obligation to provide lifesaving medications to the needy, either free-ofcharge or at a reduced rate relative to the cost of manufacture. In this essay, I argue that we can explain the ubiquitous notion of a special moral obligation as an expression of emotionally charged intuitions involving sacred or protected values and an aversive response to betrayal in an asymmetric trust relationship. I then review the most common arguments used (...) to justify the claim that the pharmaceutical industry has a special moral obligation and show why these justifications fail. Taken together, these conclusions call into question the conventional ideologies that have traditionally animated the debate on whether the pharmaceutical industry has special duties of beneficence and distributive justice with respect to the impoverished in dire need of their products. (shrink)

Much of today’s international trade is conducted according to trade agreements that involve substantial and uniform protections of intellectual property rights. Intellectual property rights are a socio‐economic tool that create a temporary monopoly for inventor firms and enable such firms to charge prices for their innovations that are many times higher than the marginal cost of production of the innovations. This allows the inventor firms to salvage their research‐costs and secure a profit on their innovations. A large body of contemporary (...) philosophical and interdisciplinary literature suggests that intellectual property rights give rise to a number of ethical problems. This review paper seeks to give an overview of what these problems are. It also offers an outline of proposals as to how these problems might be alleviated, and it briefly explains the two classical defenses of the ethical permissibility of intellectual property rights. The ethical issues surrounding intellectual property rights are most pertinent when it is socially valuable goods that are given intellectual property protection. The discussions in this paper revolve around just one product type in order to bring out the broader ethical issues surrounding intellectual property rights. In line with much contemporary literature on the ethical dimensions of intellectual property rights, the product type in question is life‐saving medicines. (shrink)

Do pharmaceutical companies have a moral obligation to expand access to investigational drugs to patients outside the clinical trial? One reason for thinking they do not is that expanded access programs might negatively affect the clinical trial process. This potential impact creates dilemmas for practitioners who nevertheless acknowledge some moral reason for expanding access. Bioethicists have explained these reasons in terms of beneficence, compassion, or a principle of rescue, but their arguments have been limited to questions of moral permissibility, leaving (...) for future research the question of whether expanded access is morally obligatory. We take up this further question and argue that pharmaceutical companies have a moral obligation to expand access. Our defense is not based on beneficence, compassion, or rescue, but instead on a reciprocal moral expectation resulting from existing social commitments that help ensure a robust pharmaceutical practice within the broader healthcare system. Our aim is to give this obligation, along with several others, a coherent and plausible structure within the wider clinical trial process so that one might better explain the sources of the dilemmas and their possible resolutions. (shrink)

An organizing framework is set out for the diverse literature on business ethics in relation to strategic management. It consists of sets of bi-polar components, spanning themes and topical themes, with a derived typology of contributions. Then, in the spirit of classical pragmatism, the organizing framework is re-cast as an integrative conceptual model of the strategy–ethics relationship. The approach recognizes that both pragmatism and dialectics can underpin progress towards integration, encompassing both normative and empirical aspects.

On January 1, 2006, Medicare Part D prescription drug coverage was initiated. Concern was immediately voiced by the American Association of Retired Persons (AARP) and Families USA that, in response to this program, the pharmaceutical industry may raise prices for drugs most often used by the elderly. This article examines the ethical implications of a revenue-maximizing pricing strategy in an industry in which third party financing mitigates an end product's true cost to the user. The perspectives of three stakeholder groups (...) are examined: the elderly, as consumers of prescription drugs, the pharmaceutical industry, as product manufacturer and beneficiary of derived profits, and the total U. S. population, as the ultimate payer for the program via tax revenues. Key questions explored include the relationships among price strategy and access to drugs at both the micro (Medicare cohort) and macro (total population) levels, and on drug development or enhancement. The role of profit in a capitalism-based health care system is also examined. Hospital industry impact on these same stakeholder groups in response to the original 1965 Medicare law is used to compare and contrast possible outcomes of the new drug program. It is predicted that pharmaceutical firms will mimic the hospital industry, adopting a price maximizing strategy for drugs covered by the program. In the process, a utilitarian effect occurs: the benefits of increased access and diffusion of drugs counterbalance inequities in financing Medicare Part D. (shrink)

Fringe stakeholders with limited resources, such as grassroots organizations (GROs), are often ignored in business and society literature. We develop a conceptual framework and a set of propositions detailing how GROs strategically gain legitimacy and influence over time. We argue that GROs encounter specific paradoxes over the emergence, development, and resolution of an issue, and they address these paradoxes using cognitive, moral, and pragmatic legitimacy strategies. While cognitive and moral strategies tend to be used consistently, the flexible and paradoxical use (...) of pragmatic strategies has important consequences, both for GROs’ legitimacy and for their potential influence over powerful organizations associated with them. We enrich our framework with the help of two illustrative cases and discuss the implications of the framework for GROs’ legitimacy strategies in business and society literature. (shrink)

Criticisms of patent laws for technological innovations in the United States reveal a multifaceted milieu of problems centered around the protection of short-term economic gain and individual property rights. In this article, we consider this a conflict between current patent laws and the innovation capabilities of organizations. We propose a solution that enables the company to assure its long-term survival in the face of these restrictions. This presumes that the firm will at least maintain its innovation capacities while preserving the (...) company's ethical values and those of its social environment. We offer a theoretical model that is designed to help managers and policymakers reorient their governance strategies for managing the innovation process, using the “ethics of responsibility,” which establishes the link to individual moral values at the beginning of a governance process as well as the consequences of a decision. Our integrated causal model of ethical innovation for patents is presented and implications for global organizations and possible solutions for patent law process failure are offered. (shrink)

A recurrent challenge in applied ethics concerns the development of principles that are both suitably general to cover various cases and sufficiently exact to guide behavior in particular instances. In business ethics, two central approaches—stockholder and stakeholder—often fail by one or the other requirement. The author argues that the failure is precipitated by their reliance upon “universal” theory, which views the justification of principles as both independent of their context of application and universally appropriate to all contexts. The author develops (...) a contextual interpretation of “constructivism” as an alternative approach, and argues that this alternative meets the above challenge. (shrink)

Ian Maitland defends sweatshop labor on the grounds that “A wage or labor practice is ethically acceptable if it is freely chosen by informed workers” (he calls his view “the Classical Liberal Standard,” CLS). I present several examples of economic exchanges that are mutually beneficial and satisfy the requirements of the CLS, but, nonetheless, are morally wrong. Maitland’s arguments in defense of sweatshops are unsuccessful because they depend on the flawed “CLS.” My paper criticizes Maitland’s arguments in defense of sweatshops, (...) but I do not claim that his conclusions are false—I do not claim to have shown that the labor practices Maitland defends are morally wrong. I argue that some of the disagreements about sweatshops between Maitland and his critics depend on disagreements about the answers controversial questions in ethical theory. In the absence of definitive answers to those questions , there are no decisive arguments for or against Maitland’s view about sweatshops. (shrink)

Antibiotic resistance is a serious public health problem on a global scale. In both developed and developing countries, the unpleasant consequences of the phenomenon are being felt. This paper discusses wild-card patent extensions as a means to incentivize research and development of new antibiotics. The thesis defended in the paper is that the implementation of such patent extensions is an appropriate legislative response to the problem of antibiotic resistance. The general idea of wild-card patent extensions is presented in the first (...) part of the paper. A number of objections to the idea are thereafter discussed and rejected. (shrink)

Diese Arbeit untersucht die Frage, ob der aktuelle Schutz des geistigen Eigentums bei Arzneimitteln in Deutschland moralisch zu rechtfertigen ist. Die Untersuchung orientiert sich dabei am aktuellen Diskurs und ordnet die bestehenden Positionen entsprechend ihrer Abstraktheit. Dabei bilden Argumente gegen einen Schutz geistigen Eigentums die allgemeinste Ebene, und Argumente, die sich spezifisch gegen deutsche Arzneimittelpatente richten, die konkreteste Ebene. Ich werde zeigen, dass starke deontologische und konsequentialistische Positionen existieren, welche die realpolitischen Auswirkungen von Arzneimittelpatenten kritisieren. Die konsequentialistische Position argumentiert in (...) erster Linie mit den jüngsten Wirtschaftsdaten, während die deontologische Position die bürgerlichen Autonomieansprüche betont. (shrink)

The PRIME Institute of the College of Pharmacy, University of Minnesota, recently released preliminary research findings indicating a trend of extraordinary pharmaceutical industry pricing of drug products in the United States (U.S.). According to researchers at the PRIME Institute, such extraordinary price increases are defined as any price increase that is equal to, or greater than, 100% at a single point in time. In some instances, PRIME Institute researchers found that drugs exhibiting extraordinary price increases are categorized as "orphan drugs" (...) (or blood-related biologic treatments) and often life-saving or life-sustaining for treating the cause or symptoms of diseases affecting fewer than 200,000 people in the U.S., or where there is prevalence of less than 5 per 10,000 people afflicted with a disease or symptoms in the community. Because of extraordinary price increases for orphan drugs — some exceeding 1000% at a single point in time -this article addresses two interrelated questions: Are extraordinary orphan drug price increases socially responsible behavior? If so, are the pharmaceutical industry's policies providing orphan drug access to American consumers in dire need of available life-sustaining and life-enhancing pharmaceuticals considered "socially responsible" behavior? The author concludes, after an interdisciplinary analysis of the legal, economic, sociopolitical, and ethical dimensions of orphan drug pricing, that they are not socially responsible – unless justified by cost and availability of health care marketplace/patient options. Furthermore, the author recommends a socially responsible industry strategic approach to insure that patients ultimately receive -regardless of cost -timely access to life-saving and life-sustaining orphan drugs. (shrink)

The most common solutions to the problem of high pharmaceutical prices have taken the form of regulations, price negotiations, or changes in drug coverage by insurers. These measures for the most part transfer the burden of drug expenditures between pharmaceutical companies and payers or between payers. The aim of this study is to propose an alternative model for the relationship between the main stakeholders involved in the price setting and purchasing of pharmaceuticals, one that encourages a more cooperative approach. We (...) draw from principles of ethics and health economics and apply them to the context of the pharmaceutical industry. The model prioritises two objectives, to make drugs financially accessible to the patients who need them, and to keep pharmaceutical companies viable and profitable. It is centered around the sharing of financial risk between the main stakeholders, which we describe as ‘enlightened risk sharing’. After establishing the foundations of this model, we expand on the type of policies that can follow these principles with current day examples. (shrink)

This study integrates insights from stakeholder theory and the literature on competitive dynamics and incumbent responses to entry. While research in economics and strategy has examined how market incumbents respond to new entrants, little is known about the heterogeneity in these responses to the entry of a stakeholder-oriented firm; our study addresses this research gap. Findings from a novel, longitudinal dataset of 206 granularly defined pharmaceutical markets in India suggest that stakeholder-oriented firm entry in these markets is associated with an (...) impact on prices and product differentiation with heterogeneous responses from high-end and low-end incumbents. Specifically, entry by a stakeholder-oriented firm results in a reduction in prices and dosage sizes from high-end incumbents, whereas low-end incumbents respond in the opposite direction. (shrink)

This article argues that the price obtainable in an open market provides the best standard for determining the justice or injustice of the price of a product. The article argues that this standard, which is closely related to positions which have been held for hundreds of years, is superior to several alternative conceptions of the just price that have been put forward in recent years and is not subject to fundamental criticisms which can be addressed to them. The article also (...) shows how this standard is grounded in more fundamental principles of justice such as desert and equality. (shrink)