How should a for-profit corporation balance its business needs with the needs of its customers?
Any for-profit corporation should balance the business needs with the customers’ needs through the free market. One concern with patents and intellectual property in the free market is monopolies or price gouging. Price gouging is a practice where a single supplier of goods raises prices unreasonably, exploiting customer demand. Mylan, manufacturer of the Epi-Pen, was accused of this in 2016 when they raised their prices over 500% in 7 years. (Peters, Cellucci & Asagbra, 2017) To mitigate this, we have laws in place to limit price gouging and monopolies from forming. Monopolies are also a big driver of unfair markets with high prices and low quality. Competition fosters lower prices and a better quality of service and goods to the consumer. In regard to the pharmaceutical market, some ethical questions revolve on the ideas of intellectual property and patents. Should pharmaceutical companies be allowed to withhold patents and intellectual property, similarly to other companies, even though the goods and services they produce are used for the common good for society as a whole? I think pharmaceutical companies should be absolutely able to profit and reinvest into their company from intellectual property or patents. However, in a biblical context, companies should sell their goods and services with regard to the consumers, treating them fairly and honorably. Leviticus 19:13 (NIV) tells us, “Do not defraud or rob your neighbor. Do not hold back the wages of a hired worker overnight.” If we as Christians follow this rule, with a basis of the eighth commandment, business owners should sell their products at a fair price to the consumer, while properly compensating themselves and their employees.
The way any company compensates themselves is to price their goods and services accordingly. In regards to pricing strategy, society in general has a negative view of pharmaceutical companies when equated to companies that do not have as great of an impact on society (i.e., Apple or McDonalds). (Huebner, 2014) This concern by society is only because of the importance of pharmaceutical companies in society. However, every company should have the liberty to earn a fair wage for their product, while serving the needs of society in a fair and free market.
Lives depend on products created by some companies. Do these companies have a greater responsibility to work towards benefitting the consumer more than themselves?
The free market provides companies with the ability to serve the population while providing jobs, opportunity and healthcare to their consumers and themselves. The idea of manufacturers providing goods and services, at below a fair price level, is equitable to stealing someone’s individual labor; a breach of personal liberty. The ‘benefit’ should be shared equally between the consumer and the manufacturer. In the relationship between the consumer and manufacturer, the manufacturer assumes risk by conducting research and development, testing, production, advertising and bringing the product to market. In turn, the consumer pays the manufacturer for that good and service of providing the product. As Christians we are commanded not to take advantage of our neighbor, refrain from stealing their property and to pay a fair wage. The question is, then, what is a fair price for the consumer and the manufacturer, or simply, how much is something worth? A free market is usually the deciding factor, the basic premise of supply and demand. With the understanding that some medicine is too expensive, other solutions should be sought to provide those in society with the ability to access those medications. That question/statement should be handled at another discussion.
However, with patents, which usually hold a monopoly due to the exclusivity of the patent, there are 5 main factors to consider: Importance, the market, the term of the patent, amount of coinciding items and the significance of the product. (Cockburn, n.d.) All of these factors are significant, independently. We know that lifesaving medicine is important to consumers, but we as consumer have to be realistic about the time and effort made to develop a drug that is patented. Society should understand the incredible undertaking it is to bring a medicine to market. On average it takes over 10 years to bring a drug to market, half of the term of a standard patent. (Riboldazzi, 2015) This means a company will only have 10 years to pay back their initial investment and earn a profit. This investment by a company and the significance of a lifesaving drug must be weighted equally and both parties working toward mutual benefits.
Look at the issue from a Biblical worldview. How would you respond if you were running such a company?
If I were running a pharmaceutical company, I would use the income earned, reinvest it into research and development and continue to innovate new and cutting edge technologies and other medicines. From a biblical worldview, that is the best way for any company to operate. The idea of a free market is that you can trade your goods or services for someone else’s goods or service, freely. In the parable of the bags of gold, in Mathew 25:14-30 (NIV) a master gives 3 servants 3 different amounts of gold. The third servant, who was only given one bag of gold, hid the bag and saved the money, not wanting to lose his masters initial investment. When the master returned to gather his gold, he scolded the servant who had not reinvested his money saying, “Well then, you should have put money on deposit with the bankers, so that when I returned I would have received it back with interest.”
This basic idea of business, taking the money they have earned and gaining interest on it, through investment, is the same with any company. We as a society recognize the impact drug manufacturers have on the public and, in turn, hold them to a high standard of responsibility. However, they should be able to operate under the same premise that so many advancements in medicine and technology were made, the free market. Jerry Falwell Jr, President of Liberty University said, “The free market is not an enemy of generosity, but a reason for it.” As a CEO of a drug company, I would embrace that idea. I would use the market to fairly sell pharmaceutical products, earn a fair wage and reinvest profits to innovate and create new medicines that would hopefully help society.
Cockburn, I. (n.d.) Assessing the Value of a Patent: Things to Bear in Mind. Retrieved from https://www.wipo.int/sme/en/documents/valuing_pate…
Huebner, J.M. (2014). Moral Psychology and the intuition that pharmaceutical companies have a ‘special’ obligation to society. Journal of Business Ethics, 122(3). Doi:10.1007/s10551-013-1773-4.
Peters, C., Cellucci, L. W., & Asagbra, O. E. (2017). Mylan and the EpiPen: Increased Access or Price Gouging? Business Case Journal, 24(2). Retrieved from http://bi.galegroup.com.ezproxy.liberty.edu/global…
Riboldazzi, S. (2015). R&D and product engineering in global pharmaceutical companies.Symphonya, (2), 57-74. Retrieved from http://ezproxy.liberty.edu/login?url=https://searc…
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