Is it ethical for pharmaceutical companies to charge what they want for their products?

Group 83

In this article we will be discussing the ethics behind pharmaceutical companies and the pricing of their products. The NHS and Vertex pharmaceuticals are currently in a stalemate in their negotiations, regarding the pricing of a cystic fibrosis treatment, Orkambi. This drug has the ability to slow the decline of lung functionality and increase the quality of life for its patients. However, people in the UK do not have access to it because an agreement has not been meet.

People before pricing

According to the British Medical Journal (BMJ), Vertex are currently being very inflexible on price, and only seek to change the National Institute for Health and Care Excellence’s (NICE) cost framework [1]. Unlike the vast majority of other drugs companies, which openly negotiate, Vertex have not budged from their asking price, at around ten times what the NHS pays for any other drug per patient per year, and have turned down the largest monetary sum the NHS has ever offered. The CEO was paid £17 million in 2017, very little tax was paid in either the UK or the USA, and with profits posted in February this year being up 40%, and £2.3 billion in the bank [2], it is clear that the financial motive of Vertex, funding the next drug, does not require the ludicrously high prices that Vertex are demanding for Okrambi, and therefore from a Kantian perspective, their motives are unethical. From a utilitarian perspective, it is most ethical for everyone that the drug is suitable for to have access to it, which the costing policy of Vertex currently prevents. It’s refusal to even negotiate on the cost demonstrates that they are not committed to resolving this conflict quickly, so as to get the drug to those who need it quicker, which prolongs their suffering.

Better profits lead to better treatments

On the other hand, restricting the sales prices of these drugs too much could result in an overall negative result for everyone.

It takes a huge amount of time and money to develop, test and manufacture drugs. The average drug takes nearly £2 billion and take over 10 years from conception to sales [3]. This initial investment needs to recuperated in the sales of the drugs produced.

Vertex, the company responsible for creating Orkambi, claims that the profits from its drugs currently in circulation are used to fund the next generation. They also claim to put much more of their money into R&D than other pharmaceutical companies, who invest heavily in their sales teams [4].

Currently Vertex is asking the NHS for £105,000 per patient every year. There are currently around 4160 people who are in need of Orkambi [2], meaning a potential income of £437 million a year. The NHS offered to pay £500 million over 5 years for access to Orkambi and other drugs that Vertex have created.

A roughly 80% reduction in price would severely reduce the profits that Orkambi generates, this will in turn hinder in the development of newer and better drugs. Drugs that would greatly benefit the lives of people with cystic fibrosis.

The company has also been recognized by Forbes as one of the top 20 most innovative companies [5].  Vertex claims that the reason behind the pricing of this drug is to help keep them innovating and helping more people with cystic fibrosis. So from a Kantian perspective their motives could be seen as ethical.

Wanting to improve people’s lives, using the drugs they have developed, is a desirable characteristics and therefore is virtuous.

People need to have these drugs and want new treatments to be developed, the simple fact is that, in order for this to happen money is needed.

Initial Decision

Our initial decision was that people’s lives and well-being should come before the profits of a company.



17 thoughts on “Is it ethical for pharmaceutical companies to charge what they want for their products?

  1. I believe that Vertex should charge only the market price for their drugs. I agree that a £17 million wage is plenty, so why do they need to charge so much? Also, as they are saving peoples lives, surely affordability should come above profitability.

  2. I do understand why companies have to set prices in the way that they do. I feel it is more the jo public that need to have their awareness raised as to what medicine actually cost and the price of our NHS prescriptions, hardly touches it.

  3. What a fascinating topic – excellent choice.

    I’m cautiously in favour of Vertex. The treatment is required but it takes time and money to develop. Vertex has made an investment that they need to recoup. Obviously, there is some debate over the amount being charged being reasonable.

    From a utilitarian perspective we want medical drugs, and Kant’s theory and virtue ethics also offer this support. Linked to this is the fact we want to be able to offer attractive careers in this area because ultimately via the treatments produced we all see a benefit.

    Ultimately, this is a challenging topic as we all need further information. The issue is, I think, whether it is reasonable for Vertex to charge what they’re charging.
    Are they asking for this amount because they need to recover the costs they incurred producing it (which to my mind sounds reasonable) or because they want to recover the costs and receive some more money for future and ongoing work. If the second then the question becomes why make this change now?

    It’s a good topic.

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