Financial

Dilemmas In the
Pharmaceutical
Industry
Edward Banuet, Murooj Al Bahrani, Munira Al Maskry and Tyler Dreben

The Pharmaceutical Industry

-

When Turing Pharmaceuticals raised the price of an older generic drug by more than 5,000
percent, the move sparked a public outcry. How, critics wondered, could a firm charge $13.50
a pill for a treatment for a parasitic infection one day and $750 the next?

The outcry has again focused attention on how drug prices are set in the United States. Aside
from some limited government control in the veterans health care system and Medicaid, prices
are generally shaped by what the market will handle.

Drugmakers and some economists argue that price controls or other efforts aimed at slowing
spending by targeting profits mean cutting money that could go toward developing the next
new cure. Because many pharmaceutical companies spend more on marketing than research,
some lawmakers counter that the industry could spend less on promoting its products. Health
insurers, in turn, blame drugmakers for high prices, even as they shift more cost to consumers,
who then fear they wont be able to afford their medications.

Fentanyl And Narcan - Profit On Both Sides

FDA has approved the sale of Fentanyl as an

over the counter prescribed drug.
Fentanyl is an opioid that is 80 to 100 times
stronger than morphine.
It is being used in place of heroin, as it creates
the same high, and 351 people died last year in
new hampshire.
Naloxone is a drug (known as Narcan) that is
now being used to counter overdoses of
opiates, with incredible effectiveness.
It went from costing $11 a syringe to $80+ a
syringe in the last year. It is also a FDA
approved drug, being developed by the same
companies who produce the fentanyl.

PROS/CONS OF COMPANYS INTEREST

PROS

Sales of more than US$10 billion a year

and profit margins of about 30%.
Recoup the cost of their millions spent
on research and development.
There will always be sick people.
Constant new drugs are being patented
Creating dangerous drug plus antidote
doubles the profit. (Ex. Fentanyl, Narcan)

CONS

Unethical
People are dying because they can not
afford drugs.
Monthly drug payments are more
expensive than a mortgage.
Medications cost very little to produce
and so expensive pills have little reason
to exist.

The profit margins for

pharmaceutical companies is
on par with and ahead of the
banking industry, with the
highest profit margin being
13% higher.

The Pharmaceutical
Companies spent an
average of $27 Billion in
2012, with profits estimated
at $11 Billion.

PROS/CONS OF PUBLICS INTEREST

PROS

People would gain more access to the

drugs
People suffering from serious and life
threatening diseases would be able to
recover easier
People will have less debt
Lower bankruptcy rates

CONS

Companies would not be able to make

as much profit
Loss in revenues
The incentives to produce more
medication may be limited, which could
discourage drugmakers to continue
production.

Bernie Sanders

Americans pay more for prescription drugs than any person in the world

1 out of 5 Americans cannot afford to pay prescription drugs

Drug prices are lower in Canada and higher in the US

The top 4 drug companies in the US made 57 billion dollars last year and yet millions of Americans cannot
afford to buy prescription drugs

People are dying because they cant buy food and they have to pay for prescription drugs

America can import fish and vegetables from all over the world yet we cant import pharmaceutical drugs
from Canada

Americans should not have to live in fear that they will go bankrupt if they get sick. People should not have to go
without the medication they need just because their elected officials arent willing to challenge the drug and health
care industry lobby, Sanders said

Donald Trump

Trump believes Americans are paying way too much for their
prescription drugs.

He would have the federal government negotiate directly with

pharmaceutical companies to obtain lower prices. Doing so,
Trump reportedly said, could enable the U.S. to save $300
billion a year.

He stands in favor of the democratic position.

Solutions For the Industry:

Pharmaceutical Transparency - Essentially forcing drug companies to provide

details on how much they spend on resources and testing, as well as the price per
pill.

Cap Consumer Co-Pays - Ensure that insurance companies will cover more of
the medication than the patient, as this is the purpose of medical insurance.

Payment based on results - If a drug really works to the best of its ability then
its value can be reflected in its price. But drugs that do not have complete
efficiency should still be much lower in price.

Work cited
http://www.who.int/trade/glossary/story073/en/
http://interactive.fusion.net/death-by-fentanyl/intro.html
https://www.youtube.com/watch?v=37VYO7Yt4ao
https://www.youtube.com/watch?v=BfdcF9gP_TY
http://www.huffingtonpost.com/entry/trump-drug-prices-hillary-bernie_us_56a7ac37e4b0172c65943f0b