Ethics of Product Pricing - Essay Example

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Though it is very difficult to draw a fine line between ethically acceptable and unacceptable behavior, it is easier to say that there is nothing more precious than a human life. In the recent years, drug manufacturers have started exploiting the consumers by charging them…
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Ethics of Product Pricing
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Module: Topic: Ethics in Drugs Pricing Though it is very difficult to draw a fine line between ethically acceptable and unacceptable behavior, it is easier to say that there is nothing more precious than a human life. In the recent years, drug manufacturers have started exploiting the consumers by charging them unjust and sky-rocketing prices. This has resulted in many innocent lives being lost, particularly of those who could not afford the drug or did not have the adequate insurance coverage. However, drug manufacturers claim that it is that their pricing policies are completely ethical and without this they cannot survive or continue to operate. Two, more common arguments, put forward by these companies are that they need to cover R & D costs and they have to cover the development costs before the product becomes obsolete. R & D costs are those costs associated with manufacture of the drugs, research done to find the cure of a disease and any other costs that are bore by the drug manufacturing companies in order to bring their product in the final shape, one that is presented to the consumers for sale. These costs are often very high and in order to cover those costs products are marked-up with these costs against the expected sales. Similarly, whenever a company develops a product, it saves its rivals from spending on the research and they use the research done by the original developer and enjoy free-riding at the expenses of the first developer. So, firms are forced to cover those costs before the patent expires and rivals start copying the drug. As a result, they charge high price to cover these costs during the time when patent is still active. As a result, this behavior is reflected in high prices for the consumers.
John Rawl’s theory of distributive justice was based on equity and liberty. It focuses on equal distribution of assets between different members of the community. Rawls also stressed that everything must be done in an act of achieving fairness. He negated the idea that actions of one person should harm another person. This can be related to the pharmaceutical industry in a way that both rich and poor in the society should receive equal health care regardless of their abilities to pay. This will create an atmosphere in the society that will lubricate the process of societal goods in which all will work towards a common aim of doing something good for society. For example, drug companies might share R & D costs, in order to provide good for the consumers or society by providing them cheaper medicines. Similarly, it can also mean that those who can afford this medicine should help those who are in need of these medicines, but do not have the ability to buy those medicines.
The point raised by Spinello is not realistic as in our modern world, which is ruled by greed, there’s no place of distributive justice. Many pharmaceuticals corporations are owned by shareholders who won’t allow these companies to sell the drugs at low prices as this would imply a loss in profit and loss in the wealth of the owners of these companies. Similarly, by equal division of wealth, this would create misbalance in the society. If everyone has the same amount of wealth and assets, then who will like doing low-paid jobs which are essential for the smooth functioning of the society such as janitors, motor-mechanics, cleaners etc. If everyone has same amount of wealth, then who will eat the food, which is considered too luxurious or too modest Similarly, if everyone is provided with same health care facilities, who will like going to new doctors or new pharmacy companies. This will create further misbalance in the society and may lead to the same problems again, which distributive justice theory attempts to solve. Read More
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