Morality of Government Price Regulation on Life-Saving Drugs

Should the government regulate the pricing of life-saving drugs?

Part 1
The free market is a dangerous tool. The crown of capitalism has created many
opportunities and prosperity within our country, but the free market has also allowed harmful
corporate actions to go unchecked. According to a study released by the Mayo Clinic in April of
2013, [n]early 7 in 10 Americans take prescription drugs(unnamed). Therefore, over seventy
percent of our population is within big pharmas chokehold. Pharmaceutical and biomedical
companies hold a monopoly over the production and distribution of prescription medicine. Many
people are dependent on medication, and will do whatever they need to obtain the medicine
that keeps them alive. These large companies are aware of this, and have capitalized on this
dependency many times. Due to the peoples need for the medicine produced by these
companies in conjunction with the spinelessness of our government on this issue, big pharma
has every right to raise prices on medicine steeply and without warning. Whenever this occurs,
those in need of the medication suffer. Due to the potential harm of the price fluctuation of lifesaving drugs, the government should regulate the pricing for life-saving drugs.
I am a utilitarian; I have absolutely no sympathy for corporate greed and corruption.
When I first learned about the unmitigated price fluctuation of life-saving medication, I was
furious. As a utilitarian, I believe that the morally just action is that which brings the most
happiness to the highest number of people. By allowing the prices of life-saving medication to
be determined by the large pharmaceutical companies who create the drug, we are allowing all
those who need the drug to come to harm, while the corporate fat cats simply receive a
marginal pay increase. To me, the choice is very clear. Remove the ability to alter the pricing of
drugs from the companies who make them. While this may seem like a rather brash solution to
some, it is the only viable solution to this problem, and a solution is needed.
I have always had a repulsion to injustice. I remember as a small child asking why there
are homeless people, to which my parents responded thats just the way it is. I was outraged
(or at least as outraged as a seven year old could be). I remember thinking that everyone is a
person, and that means everyone should be as happy as everyone else. Of course, as I aged
my ideals started to become refined, and less communistic. But one thought remained the
same: no group of people should hurt for the benefit of an individual. In this case, the executives
of pharmaceutical companies are reaping the benefits from an oppressed and captive group.
Those who defend Pharmaceutical and biomedical companies ability to fluctuate the
prices of their life saving drugs usually arent affected or aware of the issues that can arise from
this. I am very aware of the harms these price spikes can cause. My mother takes medicine for
a heart condition and to thin her blood, so she wont have another stroke. My best friend takes
daily medicine for a crippling disease, if they miss a dose, they start coughing up blood and
cant move. I take medicine for a panic disorder, just so I can get through the day without

barricading myself in the bathroom and hyperventilating until I pass out. If any of these
medications prices skyrocket, someone suffers. Whether its my friend going to the hospital to
get blood pumped from their lungs, me finding my mom laying unconscious on the ground after
a stroke, or getting detention for missing three classes because im locked in the bathroom,
rocking back and forth, sobbing. By astronomically raising the price of needed medication,
corporates are forcing hard working, good people to live the nightmares of others.

Should the government regulate the pricing of life-saving drugs?

Rollin Leavitt
Part 2
My grandfather always said, the justness of a nation can be determined by looking at
how it treats its sick and old. If this is true, America is in trouble. Everyday 7/10ths of our
population is subjected to the outrageously high price of Pharmaceuticals that they need to
simply make it through the day. Our government has an obligation to ensure equal quality of life
to all of its citizens; the governmental failure to stop large corporations from holding their clients
health hostage is an abomination and has gone on long enough. Our governments primary
function is to secure the domestic safety and happiness of its citizens; with this in mind, the
government has an obligation to regulate the price of life saving medication.
Our country, with all its flaws, is based in justice. A large part of this idea of justice is
derived from the moral philosophy Utilitarianism. Utilitarianism is a moral philosophy that states
that a just action is an act that creates the most happiness for the most people. With this in
mind, the public opinion must form governmental policy. According to a 2015 Kaiser Health
Tracking Poll,
[M]ost Americans feel that drug costs are unreasonable (72 percent) and that drug
companies put profits before people (74 percent). At the same time, the public largely
values the role prescription drug companies play, with most (62 percent) saying that
prescription drugs developed in the past two decades have made the lives of people in
the U.S. better, including about 4 in 10 (42 percent) who say a lot better. (Mangan)
The people have spoken. In the eyes of utilitarianism, it is not only just, but necessary to
regulate pricing of life-saving medication. By allowing pharmaceutical companies to charge
outrageous prices for life-saving drugs, the government is allowing 72% of the population to
come to harm. In our constitution, it states that it is the individuals duty to rise against any form
of government deemed maleficent. No just government would allow pharmaceuticals to charge
such a ridiculous price; for that matter, all but three world governments, just or not, restrict drug
pricing.
According to professor Rafi Mohammed, American drug prices are among the highest in
the world. Prices in advanced countries are often 50% cheaper than what Americans pay for
drugs. (Mohammed) But why are pharmaceutical companies allowed to charge so much more

in the U.S.? The simple answer is because our economy and political system allows for
monopolization on products and unregulated price fluctuation. One good example of how these
two things can combine to form a major issue can be seen in Daraprim. Daraprim is an antibiotic
which is specifically meant for treating a life-threatening parasitic infection. In August of 2015,
the patent for Daraprim was acquired by Turing Pharmaceuticals, who overnight raised the price
of this drug by over 5000% (Bernstein). This is absolutely ridiculous, price fluctuations of this
caliber do not occur in a truly free and fair market. The most important detail to note in this
situation, is that neither the method of manufacturing nor the materials used to synthesize the
drug changed.
When asked to justify the large price increase, Turing Pharmaceuticals released a
statement saying the price increase was to generate funds for the development of a new more
effective treatment. This is fair. Even though it may be rather suspicious to only raise the pricing
of one drug, people need new drugs to combat infections of growing strengths. I would have no
issue with this explanation, if they were not spending more money in marketing than in R&D.
According to Ezekiel J Emanuals article, "Holding Drug Companies Accountable for Drug
Prices", 9 out of the top ten pharmaceutical companies spend more money on marketing than
on research and development: ... only one of the nine largest drug companies spends more
than 20% of revenue on research. For all but one company, marketing exceeds 20% of revenue,
and exceeds research spending. (Emanual) Any system which allows disingenuous and
incredibly greedy actions like Daraprim price fluctuation is clearly broken. But what can be done
to fix it?
With our poly-economic structure, it is exceedingly difficult to change legislation. So how
will we regulate drug pricing while still allowing for incentivization, and a relatively free market?
The solution to a complex problem, is often very simple. This instance is no different; the
government can easily regulate drug pricing through the same methods applied in the
Affordable Care Act. A committee to discover a solution to this issue, called CAP, released a
plan to assist in the price regulation of life-saving drugs, as summarized in Ezekiel J Emanuals
article, "Holding Drug Companies Accountable for Drug Prices". Emanual states,
One [policy] is to ensure there is a relationship between drug prices and research
investment. This approach would be similar to the Medical Loss Ratio (MLR) policy in
The Affordable Care Act, which requires insurance companies to spend at least 80 or
85% of their premium revenue on actual health care (rather than profits or administrative
costs), and has actually helped moderate health insurance premium increases. Like the
MLR policy, this proposal would require drug companies to spend a certain proportion of
their revenue or invested capital on research, holding them accountable for their rhetoric
on research spending. If the percentage of their research budget is too small, then they
would be assessed a penalty that would be given to biomedical research institutions, like
the National Institutes of Health, which generate the basic research that drug companies
later develop into actual drugs.

Brilliant. With this policy, not only would pharmaceutical companies be prevented from gouging
the prices of medication, but it would also increase drug research. The process through which
this is accomplished is seen to be effective in another health care model, and has a very high
chance of success. Both of these are very positive outcomes. The drawback to this plan is that it
may dis-incentivise drug companies from producing more and newer drugs. This is a genuine
concern, however, many countries, including Australia, Germany, France, Britain and
Switzerland, governments have stepped in to price drugs according to value because drug
companies have not been willing to moderate their prices (Emanual). Patients and drug
recipients in these very well developed countries are not suffering from price regulations, and
neither will American citizens.
Imagine taking a pill that cost $5 before you go to bed. The next morning, you open the
newspaper to see that the pill you took last night now costs a month's rent. This is ludicrous.
The free market is a useful tool, there is no denying that, but is its preservation really worth the
possible loss of life from being unable to buy your prescribed life-saving medicine? No. Human
life cannot be translated into dollars. Corporate greed is a monstrous thing, and the unfortunate
truth is that we must regulate it. For the greater good.

Works Cited
Bernstein, Jared. "Drug Price Controls Are Vital in a Market Thats Not Free." New York Times
29 June 2016: n. pag. Print.
Emanual, Ezekiel J. "Holding Drug Companies Accountable for Drug Prices." Huffinton Post
(2016): n. pag. Web.
"Kaiser Health Tracking Poll: August 2015 | The Henry J ..." N.p., n.d. Web. 25 Oct. 2016.
Mangan, Dan. "Can This Plan Help Control Spiraling Drug Prices?" CNBC (2015): n. pag.
Www.cnbc.com. CNBC, 18 Sept. 2015. Web. 24 Oct. 2016.
Mohammed, Rafi. "Its Time to Rein in Exorbitant Pharmaceutical Prices." HBR (n.d.): n. pag.
Www.HBR.org. Harvard Business Review, 22 Sept. 2015. Web. 24 Oct. 2016.

MLA formatting by BibMe.org.

Should the government regulate the pricing of life-saving drugs?

Rollin Leavitt

Part 3
A man falls down in Central Park. Within twenty minutes the paramedics arrive and rule
it a stroke, and within forty hes in the hospital. Hes given several blood thinners and within two
hours, he walks out on his own. Remarkable. The medical advancements we have seen in our
life times can only be described as such: remarkable. We can all agree on one thing, regardless
of political or social position; we are better off now than we were a few hundred years ago. This
is in large part due to advancements in the field of medicine. Now, in our modern day and age,
we have become oblivious to the cost of innovation. There is talk of federal limiting of the pricing
of medication, private intellectual property. This would be a major mistake. The government not
only has no right to, but also cannot regulate prices of life-saving drugs due to its moral
obligation to ensure the health of its future and current citizens.
I know. In some cases, people have abused their ability to price their drugs however they
wish, but there is a good reason at the core of it. More innovation. There are a countless
number of horrific diseases that are running rampant in the world today. The exorbitant prices of
many drugs are to fund research. With this in mind, limiting these prices would severely hinder
research. Darius Lakdawalla , the Quintiles professor of pharmaceutical development and
regulatory innovation in the School of Pharmacy at the University of Southern California, states
in an opinion piece that federal price control would demolish companies abilities to create new
and needed drugs.
Our research finds that, if the U.S. government were to begin negotiating drug prices the
way other governments do, drug prices would fall by about 20 percent, but innovation
would fall by even more. Patients would see their lives cut short by delayed or absent
drug launches. On balance, America would lose more in the form of premature mortality
from price controls than it would gain in lower spending
Are the dollars saved from price control really worth the deaths this would cause? Imagine a
world without pain or aging. This world is almost within our grasp, but the regulation of drug
pricing would surely tear this dream away from us. We owe it to ourselves, and our children to
pay a higher cost for medicine. Its simply the cross we all must bare.
Every person has the freedoms to do what they wish with the physical and intellectual
property they own. This was one of the founding ideals of our country. John Locke was one of
our founding fathers, and possibly one of the greatest minds of his time. Now, I dont know for
sure what Locke would say on this issue, but in his time locke strongly advocated for the respect
of individual right and sovereignty. If Locke could comment on the current situation, I am sure he
would advocate for the rights of these businesses. He may not have liked what they are doing,
but would have respected them all the same. We owe these people the same respect. They are
trying to do good with what they can, we must simply allow them.
Ok. Now all rhetoric and double speak aside, the current pricing of drugs is ludicrous. No
free market should allow for overnight price spikes of 4000%. The current system is broken, but

coat-tailing pharmaceutical companies is only going to worsen the problem. As stated in a study
on the long-term effects of price regulation of pharmaceuticals, performed by the Rand
Corporation:
The results illustrate that imposing price controls would offer a modest benefit to the
current generation but pose substantial risks and potentially high costs for later ones. By
contrast, financing consumer price reductions without affecting manufacturer revenues
appears robust and beneficial for both current and future generations across a range of
assumptions. Given uncertainty about pharmaceutical markets, policymakers may find
copay-reduction strategies less risky than price controls over the long term and more
beneficial than the status quo.
So if regulation isnt the answer, then what is? Well, keeping in likes with capitalism, competition
is. If more companies are allowed to produce more drugs, competition will surely drive down
drug prices to a reasonable figure. Tom Coburn and Paul Howard state in an article published to
the wall street Journal: A study commissioned by the Manhattan Institute reported that bringing
a new generation of FDA-approved drugs to market even a single year faster could deliver $4
trillion in benefits to patientsmeasured in longer lives lived in greater health. With this in mind,
the solution to the over pricing epidemic is more drugs faster.
I dont want to live in a world where the man from central park needs to die, but I also
dont want to see him sell his soul to live. There is a middle ground somewhere, and I believe
that creating more innovation is just that.

Works Cited
Coburn, Tom, and Paul Howard. "The Answer to High Drug Prices Is More Drugs, Faster." The
Wall Street Journal (2015): n. pag. Www.wsj.com. Web. 31 Oct. 2016.
Kemmerling, Garth. "Locke: Social Order." Www.philosophypages.com. Brittanica, n.d. Web. 31
Oct. 2016.
Lakdawalla, Darius. "Drug Price Controls End Up Costing Patients Their Health." The New York
Times (2015): n. pag. Www.nytimes.com. New York Times, 23 Sept. 2015. Web. 31 Oct.
2016.

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