Ethical Theories Analysis

Subject: Law
Type: Critical Analysis Essay
Pages: 6
Word count: 1447
Topics: Human Rights, Ethics, Freedom, Medical Ethics, Pharmacy

The theory of justice argues that society should be designed in a way that the greatest amount of freedom and rights are given to the members and to be only limited by the assumption that the freedom of one person will not infringe the rights and freedom of others. On the other hand, the theory expounds that the inequalities, either economic or social should only be accepted if the person who is worse off is better in that condition than if there was equal distribution of the resources. Lastly, it expounds that in case of such inequalities, this status should not make it harder for those who lacks the resources to ascend to top positions. Pharmaceutical companies are part of the larger society. They accrue their profits from the society. As a result, they should act ethically and even participate in corporate social responsibility. According to this theory, they should not take advantage of the patients’ desperation. On the contrary, they have a moral obligation of improving the lives of the people. This is ensuring that drugs are easily accessible by all people irrespective of their social status. In the past one decade, hundreds of families have ended up becoming poor after spending all their savings on these drugs. On the other hand, each year, these companies are announcing huge profits after taxes. The reason is that top managers are driven by the urge to make more returns in order to satisfy the interests of the stakeholders. However, this is done at the expense of the members of the public. The theory states that the society should be designed in a way that freedom and rights of the people are respected. Nevertheless, these companies have taken control over the lives of the people. They dictate the prices because there is less competition and weak legal structures to protect the members of the public. 

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Despite the liberalization of markets, pharmaceutical sector in the country should be regulated to avoid frequent increase of prices. In the past one decade, the demand for drugs has increased tremendously. However, the companies have been investing heavily in their production systems. Each year, a lot of taxpayers’ money is spent on research. The main beneficiaries are these firms. The reason is that they have the technology and human resource to manufacture drugs. However, companies such as Mylan have been accused of colluding with government officials to create barriers of entry for other interested investors, an aspect that would intensify the level of competition, thereby, lowering the prices of the drugs. Government officials make it complex for other international pharmaceutical companies which have diversified their operations to different markets across the world to access the US market (Strech & Mertz, 2016). These are firms that have the ability to produce life-saving drugs at lower prices. Local companies take advantage of people who are desperate for the drugs. For instance, Turing Pharmaceuticals increased the price of Daraprim from $15 to$750. The company did not give any concrete evidence on the reasons for price changes within a short period of time. This is a violation of the ethical guidelines that must be observed by companies that are operating in the market. 

Kant’s theory states that the righteousness or wrongness of an act cannot be evaluated on its impact but based on whether it fulfills its duty. According to this theory, principle of morality is supreme. Therefore, it should guide all firms that are operating irrespective of their financial strength or the level of competition in the market. However, Mylan violates this morality by failing to put the interests of the people at hand. Instead, it is driven by the urge to make more profit even as people suffer. According to Nagle & Hogan (2016), there are several strategies that can be used to determine whether the prices are ethical. The prices are ethical if they are paid voluntarily, buyers have ample information regarding the product, and the exchange provides equal access to the users regardless of their ability to cater for the cost. All these aspects have been violated by pharmaceutical companies. For instance, prices are not paid voluntarily. On the contrary, they are paid when patients are compelled by circumstances. In this case, the buyer does not have an option of not purchasing. Secondly, pharmaceutical companies do not provide ample information regarding the price changes. Instead, they adjust the prices without consulting all stakeholders. Lastly, increasing the prices makes it hard for the low and medium income earners not to afford the drugs. This amounts to discrimination based on the social classes. 

Stakeholders Analysis


Pharmaceuticals industry is less competitive compared to other business sectors. The reason is that it holds a critical role in the society. As a result, the government is keen in regulating the sector to avoid any lapses that might affect the health of the population. Some of the competitors include Eli Lilly & Co, Merk & Co, and McKesson. However, many of these firms have specialized on particular drugs. In 2013, there was a glimpse of hope that the entry of Sanofi would play a significant role in reducing the price of EpiPen. However, Mylan responded by increasing the prices of the drug. The reason is that the firm had desired to differentiate itself with the rest of the competitors as the premier brand that has a superior product. This forced Sanofi to recall its products and exit the market, an aspect that enabled Mylan to once again become a monopoly (Ho, 2017). This has left the buyers on the mercies of the company. Furthermore, lack of the necessary intervention has seen the company take control of the prices, thereby, making extremely high profits. 


Low ranked employees have little or no role in setting the prices of the drugs. Instead, the decision is made by top level managers. However, unlike in other businesses, the decision is not based on market research or the existing trends in the market. On the contrary, it depends on the company forecast especially in regards to profits. 

Civil Society

With enhanced democracy in the country, many civil societies have been weakened and their role in the society watered down. This has created room for unethical business practices. The existing civil rights focus on human rights violations (Flanigan, 2017). However, they rarely deal with business practices. The reason is that many of the price increase are driven by the forces of demand and supply. In this case, civil society remained silent even as thousands of citizens were left helpless by the adjustment of prices of the critical drug.


The bargaining power of suppliers in the pharmaceutical industry is limited. The reason is that there are only few players. As a result, suppliers just like customers do not have any other option rather than providing their raw materials to the existing firms. 


The main interest of the shareholders is high dividends. This has put a lot of pressure on the top management of the companies. As a result, they tilt the prices in order to meet their demands. This has affected market prices over the years.


Government has a critical role in regulating significant sectors of the economy. However, it has been slow to react especially putting into perspective that there are only few existing companies in the market. Putting regulations might force the companies to collude and hold the product, an aspect that would create an artificial shortage thereby worsening the current situation (Wündisch & Collins, 2003).

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The current companies have created a barrier of entry for the interested investors. Having been in existence for some time, they have accumulated huge amounts of money which makes it very hard for new entrants to compete effectively with them. Many of them have opt out of the US market and looked for opportunities in other existing markets across the world. 


The justice system should work with other relevant authority to set a cap on prices. 

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  1. Flanigan, J. E. (2017). Pharmaceutical: Why patients have a right to self medicate. NEW YORK: Oxford University Press.
  2. Ho, D. (2017). Philosophical issues in pharmaceutics: Development, dispensing, and use. Springer.
  3. Nagle, T. T., & Hogan, J. E. (2016). The strategy and tactics of pricing: A guide to growing more profitably. Princeton, NJ: Recording for the Blind & Dyslexic.
  4. Schoonveld, E. (2011). The price of global health: Drug pricing strategies to balance patient access and the funding of innovation. (Price of global health.) Farnham: Gower.
  5. Strech, D., & Mertz, M. (2016). Ethics and governance of biomedical research: Theory and practice. Springer.
  6. Wündisch, K., & Collins, M. H. (2003). International transfer pricing in the ethical pharmaceutical industry. Amsterdam: International Bureau for Fiscal Documentation.
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