Sunday, September 23, 2018

Pharma exec says he had “moral requirement” to raise drug price 400%

A pharmaceutical company executive defended his company's recent 400% drug price increase, telling the Financial Times that his company had a ‘moral requirement to sell the product at the highest price.’ The head of the US Food and Drug Administration blasted the executive in a response on Twitter.

“Nirmal Mulye, founder and president of Nostrum Pharmaceuticals, commented in a story Tuesday [Sept. 11] about the decision to raise the price of an antibiotic mixture called nitrofurantoin from about $500 per bottle to more than $2,300. The drug is listed by the World Health Organization as an ‘essential’ medicine for lower urinary tract infections.’I think it is a moral requirement to make money when you can,’ Mulye told the Financial Times, ‘to sell the product for the highest price.’

“The Financial Times said Mulye compared his decision to increase the price to that of an art dealer who sells ‘a painting for half a billion dollars’ and said he was in ‘this business to make money.’

“According to the Financial Times, the executive defended ‘Pharma Bro’ Martin Shkreli, who was once dubbed the ‘most hated man in America’ after his company raised the price of an AIDS drug by more than 5,000% in 2015. Shkreli was recently sentenced to seven years in prison for fraud due to mismanaging money at his hedge funds.

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“‘I agree with Martin Shkreli that when he raised the price of his drug he was within his rights because he had to reward his shareholders,’ Mulye was quoted as saying.

“FDA Commissioner Dr. Scott Gottlieb issued a sharp rebuke of the CEO on Twitter shortly after the story published, saying ‘there's no moral imperative to price gouge and take advantage of patients.’

In comments to CNN on Wednesday, Mulye said he was not quoted accurately. ‘The word morality was used in the conversation, but not in the context of price increases,’ he said.I said I have to raise prices when I can -- how to get the best prices for my products, so that I can survive,’ Mulye told CNN. ‘It is about the survival of the business. It has nothing to do with morality.’ The Financial Times said Wednesday it sticks by its story.

“In his remarks to CNN, Mulye went on to say he ‘nearly went bankrupt’ twice and that he lost money after buying a plant in Ohio, which he said employs just under 100 people. ‘Is it moral for me to lose money?’ Mulye asked. ‘If I don't make money, then I can't create those jobs. And where does the money go when I make it? It goes back into research and hiring new people right here in the US.’

“He said the real villain is the ‘incompetent and corrupt’ FDA, which he said has placed regulatory burdens on the industry, leading to higher drug prices. He said he fired off an email to Gottlieb after his tweet: ‘Basically, I said in a nutshell that he does not have the necessary competence to comment on the morality of drug price increases, which is a complex subject. Honestly, Gottlieb should stay away from tweet, and he needs to stay in his office and listen to people like me and reform the agency,’ Mulye said.

“Mulye noted his drug is the generic version and less expensive than the branded version, listed at $2,800. ‘I'm being vilified for no good reason,’ he said. ‘It shows that the highest office at the FDA and the media doesn't understand how the drug pricing works.’

“The Trump administration has pledged to tackle the soaring costs of drug prices, with the president unveiling a plan in May to increase competition, reduce regulations and change incentives for players in the pharmaceutical industry. When he announced his plan, President Donald Trump slammed drug makers, health insurers, pharmacy benefit managers and others for profiting off American patients. ’The drug lobby is making an absolute fortune at the expense of American patients,’ Trump said.” [If Trump were serious about lowering drug prices he'd have to take on the U.S. drug manufacturers, which he hasn't, rather than blaming foreign drug manufacturers].  


  1. Are there legitimate rights that “ought to” take precedence in particular circumstances or situations such as in the one described above? Consider how do the words “ought to” entail an obligation for CEOs of pharmaceutical companies? How do the words “ought to” differ from the word, “duty?” Are duties required by conscience or by law? Would we say that the failure of someone who can lower the costs of a life-saving drug for thousands of people when he is knowingly in a position to do so is morally wrong? Do moral rights exist prior to and independent of a government's recognition of them, or when they are made legal? Is Mulye morally and legally responsible for lowering the costs of nitrofurantoin? How can morality be justified to someone, like Mulye, who is not moved by moral considerations?

  2. “Almost 2/3 of American Families Cannot Afford a Single Pill of a Life-Saving Drug. An AARP study of 115 specialty drugs found that the average cost of a year's worth of prescriptions was over $50,000, three times more than the average Social Security benefit. Although it's true that most people don't pay the full retail cost of medicine, the portion paid by insurance companies is ultimately passed on to consumers through higher premiums. Pharmaceutical companies pay competitors to keep generic drugs out of the market, and they have successfully lobbied Congress to keep Medicare from bargaining for lower drug prices. The companies claim they need the high prices to pay for better medicines. But for every $1 they spend on basic research, they invest $19 in promotion and marketing”-Paul Buchheit