The drug deflazacort has been used for many years to treat a terrible disease called Duchenne muscular dystrophy. About 15,000 Americans suffer from this incurable disease. Deflazacort is a drug that has been shown to be much more effective than conventional steroids. If someone in your family has the disease, you can import the drug for about $1,200 per year. If you try to buy it here, it will run you about $89,000 per year. This is not a joke.
Now for the “good news” if you qualify for the rebate program (always a tough road), the price will go down to a mere $54,000 a year. The company who bought the rights to sell the product here, Marathon Pharmaceuticals, has sought approval for the drug under a provision known as the Orphan Drug Act. What this means is that even though deflazacort is a generic drug in Europe – and widely in use for many diseases, the Marathon Pharmaceutical company (with the help of our government) can claim is as a newly developed drug to treat diseases of young children.
The company is playing a game under the guise of a legal loophole. In bringing in the established drug under the Orphan Drug Act, they can raise the price through the roof claiming it is a newly developed treatment. Is it unethical? You can bet someone’s life on it!
When will the game stop?
Price gouging on the part of pharmaceutical companies is not new. What is new is how there are new and creative ways that companies are playing the game to deceive customers.
As we discussed, although in Europe deflazacort has been widely used to treat Duchenne muscular dystrophy, it has not been approved for such use in our country. It has been approved for other conditions apparently, but not for Duchenne muscular dystrophy. This makes the medication eligible as an orphan drug.
What Marathon Pharmaceuticals is doing is not unethical under the laws that are in place, but it is unethical if you step back and take a rational look at how their marketing department is hyping an existing drug as a new cure.
The question is when do we stop playing this game with people’s lives? When do we value people over profits?
Apparently, many pharmaceutical companies are all too happy to not only make profits (which is their free enterprise right), but they are more than content to make exorbitant, insane profits. Sometimes the profits are so huge that they can legally break the financial backs of the families struggling to pay bills. How many of us could afford $89,000 a year for a single medication?
The patient may benefit somewhat, that is true, but for an incurable disease an alternative, perhaps slightly less effective drug may be the only choice. Yes, it breaks our hearts, but what can we do?
I feel that what we can do is to demand of pharmaceutical companies, the healthcare industry and even the media to demand an ethical review board of any new pharmaceutical that is about to be released. I also feel the hearings should be public. While this may sound as though it is a somewhat radical approach, it is my contention that spiraling healthcare costs along with outrageous drug prices are forcing the issue. I do support companies justifying why a drug selling for $1,200 a year in Europe can turn around and charge $89,000 here.
There is a precedent for such review. Most often our utility companies must justify their price increases. Why? Because they hold a monopoly. If a pharmaceutical company is the sole importer or developer of a drug, do they not hold a monopoly as well?
If an ethical discussion on pricing does not take place, who will look out for us? The FDA? FTC? The government has already proven they are not necessarily on our side. Good ethics is on our side, and it will prevail if we allow it to happen.
YOUR COMMENTS ARE WELCOME!
Mr. Gallagher,
This article was my first exposure to you and your perspective on ethics and I must say, I am inspired by your writing and the heart behind it. I’ve since poked around your website and have found your overall message incredibly valuable and absolutely needed! Truth be told, I was looking for a place to chime in for an undergraduate business ethics assignment; specifically, a place to discuss how Natural Law might be a relevant starting point for a discussion on ethical business decision-making. The case you made above about the unethical nature of the Deflazacort issue seems like a perfect argument to reinforce with an appeal to Natural Law.
I’m fairly confident that the relevance of Natural Law in ethical decision-making would be promptly dismissed by your proposed ethical review board, but it may be useful in shifting public opinion regarding the definition of ethical behavior. As you say in your 5 minute “Watch Chuck in Action” video, “Human beings, by nature, are going to do what is socially acceptable; and there are lots of socially acceptable things that, by nature, aren’t right.” I was pleasantly surprised to find you appealing to some intrinsic (natural) law that dictates human behavior as well as right and wrong; that is, that somethings, by there very nature, are wrong.
Velasquez and Brady (1997) (citing work by Thomas Aquinas) suggest that there are “‘self-evident’ normative principles that govern practical reasoning, i.e., reasoning about what one ought to do” (p. 87). The existence of these self-evident principles is the basis for Natural Law, the primary principle of which (according to Aquinas) being that “good ought to be pursued by action and evil avoided.” Everyone knows (intrinsically) that what Marathon Pharmaceuticals is doing with Deflazacort is not only unethical, it breaks an unspoken law that every human understands (whether they admit it or not). The only good Marathon is pursuing is their own. Not only that, by making this medication so inaccessible for the average family, one might even describe Marathon’s behavior as “evil.”
Perhaps you’ll find this comment encouraging and insightful. Maybe you’ll find it obnoxious and ill-placed. Either way, I want to thank you for the work you’re doing to make the world a better place, and thank you for a space to not only hear your valuable insights but to be heard as well.