Dr. D is a primary healthcare worker in a large city in an East European country. He struggles to make ends meet for his family given his paltry income. Recently, Dr. D was approached by a multinational pharmaceutical company at his practice. He was told that for every prescription of the company’s product for high blood pressure, he will receive an additional 5 dollars. Dr. D believes it is a pretty good medication but knows there are other equally effective, though much less expensive medications. He does not want to engage in unethical prescribing, but the monetary incentives offered to him make this a difficult choice.
Company E has a new drug that could considerably help to cure inflicted populations in Africa and elsewhere. However, this new product is priced well beyond the purchasing power of most persons in developing countries and would significantly drain already limited health budgets of developing country governments. The company argues that it needs to price the drug at a rate that will enable it to recoup its significant research and development costs. But people will die without access to it.
The phrase “access to medicines” as used in this context refers to the social problem of providing medicines to those who need them both domestically and globally. The problem exists primarily because of the high cost of these medicines. In addition, the phrase “access to medicines” has also been used to refer to the need to create medicines for disease that primarily afflict those in the developing world for which there is no market. The term “corporate social responsibility” refers to the moral duty of corporations to provide these medicines even if it entails sacrificing profit.
Access to medicines is important both to us as individuals and collectively. From an individual point of view, pharmaceuticals make us feel better when we are sick by either treating existing health conditions to help us live or to heal us. When we are well, pharmaceuticals can prevent adverse health conditions from developing. Pharmaceuticals, if used appropriately, have the power to improve and prolong our lives. As pharmaceuticals have curative and therapeutic qualities, they cannot be considered as simply ordinary goods. Moreover, access to essential and good-quality medicines has been argued by many to be a basic human right. This is understood from the Universal Declaration of Human Rights and consequent covenants, although not universally accepted on the basis of philosophical reasoning.
The collective problem relates to the practical issue of ensuring access to medicines. Should we pay for individual drug treatment no matter what the price? If we assume as our premise that access to medicines is a basic human right, then what implications does this have for pharmaceutical organizations and their shareholders? Access to essential medicines has become a central topic within international policy making. It is increasingly viewed as a fundamental human right, with international human rights law placing attendant obligations on states to ensure access (Cullet, 2003). Specifically, Article 12 of the United Nations (UN) International Covenant on Economic, Social and Cultural Rights outlines the “right to the highest attainable standard of health,” which includes the right to the availability of essential medicines as defined by the World Health Organization (WHO) (UN Committee on Economic, Social and Cultural Rights, 2000). Through the legal obligations to “respect,” “protect” and “fulfill” the right to health, governments have implicit duties to ensure that pharmaceutical systems are institutionally sound, transparent, and have appropriate mechanisms to reduce the likelihood of corruption or undue influence. This includes sufficient regulation of the pharmaceutical industry to ensure that the “appropriate” corporate behavior is being practiced. Regulation of the pharmaceutical system is a core government responsibility. Unfortunately, in most developing countries, weak regulatory agencies result in lax standards.
As the required duties are not being followed, the global pharmaceutical system is unsatisfactory on several moral grounds, the most compelling of which is that access to pharmaceuticals is often a life and death issue. Until the global population has equitable and regular access to essential medicines, this morally reprehensible situation will persist. In this chapter, we argue for the need to develop global pharmaceutical systems that are commensurate with the right to essential medicines and the moral importance of access to those medicines.
To begin with, we need to address market and governmental failures and start authentically caring for others, particularly those who live beyond our borders. This perspective requires a rethinking of the primacy of market principles, particularly the primacy of shareholder interest in profit maximization over individual health needs – in this case, the right to access to affordable medicines. Access here implicitly refers to public health policies that promote affordable, appropriate, good-quality medicines as needed.
In Ghana, as an example, despite availability of pharmaceuticals in many health facilities across the country, access to drugs is largely limited by financial barriers for the majority of the population, particularly the poorest of the poor. As Management Sciences for Health (MSH) has reported, recent data indicate that 40% of Ghana’s population earns less than the minimum wage and that this proportion is even higher in rural areas (MSH, 2003). As a result, the poverty level makes it difficult for patients to purchase drugs. The cost of a recommended adult treatment course for pneumonia for a minimum wage earner will be two days of wages from a private pharmacy, one and three-quarters days from a private healthcare facility, and one and a half days from a public healthcare facility (MSH, 2003).
Global inequities in access to pharmaceuticals are stark between developed and developing countries because of market and government failures and income differences (Reich, 2000). People in developing countries make up about 80% of the population but only represent about 20% of global pharmaceutical sales (MSF [Médecins Sans Frontiéres], 2001). More specifically, high drug costs, weak or corrupt purchasing patterns and distribution systems, and the potential consequences of the Trade Related Aspects of Intellectual Property (TRIPS) agreement further constrain drug access (Henry and Lexchin, 2002). Inadequate access to essential drugs is not only a concern in less-developed countries. In the USA, for example, many seniors and uninsured people cannot afford the drugs they need (Henry and Lexchin, 2002). Even in Canada, many patients with needs for particular drug therapies (e.g., for cancer) are denied treatment because of the exorbitant drug costs.
While spending on pharmaceuticals represents less than 20% of total public and private health spending in most countries belonging to the Organisation for Economic Co-operation and Development, it represents 15–30% of health spending in transitional economies and 25–66% in developing states. In most low-income states, pharmaceuticals are the largest public expenditure on health after personnel costs and the largest household health expenditure. Family illness, including drugs, is a major cause of household poverty in developing states (Velasquez et al., 1998). One of the major differences between developing countries and advanced economies is that in developing countries the majority of pharmaceutical expenditure represents out-of-pocket payments: anywhere from 50% to 90% (Velasquez et al., 1998). Consider that, along with the fact that about 1.3 billion persons survive on a dollar a day, and we understand plainly why there is a drug gap. If provision of pharmaceuticals is not being covered within the public sector and patients must rely on out-of-pocket payments for their drug needs, many will simply not be able to afford them.
Many of the problems with access to essential medicines are best corrected by governments and international organizations. The inequities in the pharmaceutical system do not result from one single factor but rather from a complex interweaving of many. One of these is government deficiencies. More government spending on health generally and pharmaceuticals (including infrastructure) in particular is a necessary condition for improving access to pharmaceuticals. The WHO’s Commission on Macroeconomics and Health found that basic healthcare spending in the poorest countries would require $57 billion in 2007. This would be the necessary annual health outlay for both health infrastructures and the care against infectious diseases and nutritional deficiencies (WHO, 2001). In many of these developing countries, the overall health expenditure may be as little as US$10–12 per person per year (WHO, 2003). Furthermore, in 1999, 39 of 94 reporting countries (41%) had a public drug expenditure of less than US$2 per person per year despite having large numbers of people living with the human immunodeficiency virus (HIV) and the acquired immunodeficiency syndrome (AIDS) (WHO, 2000). On top of this inadequate percentage of spending on health and drug expenditure, inefficiencies and/or corruption in the prescription, storage, and use of drugs in developing countries are such that some countries do not gain enough from allocated budgets. (See Cohen [2006] for more on this issue.) The failures of developing country governments are both internal – through poor governance – and external – through external forces such as structural adjustment programs that enforce reduced expenditure on healthcare systems. In addition, the arms trade and the mechanisms through which debts are created by developed nations further impoverish poor countries.
Markets work effectively and efficiently when there is real price competition, comprehensive and accurate information, an adequate supply of drugs, consumers are able to make informed and beneficial choices between competing products, and there are few barriers for entry to the market. However, there is significant evidence that allowing markets to reign supreme in relation to pharmaceuticals does not lead to desirable outcomes because pharmaceutical markets are not typical for a myriad of reasons. Firstly, consumers do not typically make choices about their pharmaceutical needs. Their healthcare provider prescribes a medicine for them and may not always act in the best interest of the patients but rather on the basis of self-interest. This is the classic principal-agent dilemma. Secondly, there are information asymmetries between consumers and healthcare providers, between healthcare providers and manufacturers, as well as between manufacturers and governments. Patent protection means that there are market monopolies for products, which prevents price competition and essentially distorts the market.
We are compelled to think about access of the poorest to essential medicines because as the numbers point out the inequities are glaring. There is an 80/20 distortion in the global pharmaceutical market. Even though developing countries represent about 80% of the global population, they represent a relatively small proportion of the global pharmaceutical market, about 20% of the global value, thus providing limited market incentives for the development of new drugs specific to diseases of those countries (including many tropical diseases). Since 1973, more than 25 new infectious diseases have emerged, all requiring treatment with pharmaceuticals. Some infectious diseases, such as HIV/AIDS, are global in their scope and are particularly devastating. Other diseases like cholera, tuberculosis, and malaria are mainly disease burdens of developing states. New infectious diseases such as the severe acute respiratory syndrome (SARS) continue to evolve and require drug treatments.
One of the arguments industry raises for the application of robust intellectual property law is that it could conceivably promote research and development of products in those markets that formerly did not adhere to strict intellectual property standards. But this is unlikely to happen anytime in the near future given that we see limited spending on diseases of the poor despite increased global expenditure on health research and development. In 2001, an estimated US$70 billion was invested globally in health research and development, with the private sector in the USA alone accounting for just under half of the spending (MSF, 2001). An analysis of drug development outcomes since 1975 shows that only 15 new drugs were indicated for tropical diseases and tuberculosis (MSF, 2001). These diseases primarily affect poor populations and account for 12% of the global disease burden. In comparison, 179 new drugs were developed for cardiovascular diseases that represent 11% of the global burden of disease. Finally, out of the 1393 new drugs approved between 1975 and 1999, only 16 (or just over 1%) were specifically developed for tropical diseases and tuberculosis, diseases that account for 11.4% of the global disease burden. The WHO’s Commission on Intellectual Property Rights, Innovation, and Public Health (CIPIH, 2006, p. 13) identified an interdependence between poverty, disease burden, and research capacity: “poverty affects purchasing power, and the inability of poor people to pay reduces effective demand, which in turn affects the degree of interest of for-profit companies.”
How commensurate are pharmaceutical prices with the costs of research and development? And, should profit maximization supersede life-saving medicines for those most in need? If market principles encourage profit maximization, surely we need to rethink its incentive structures and use regulatory methods to infuse a criterion of compassion, along with equity, fairness, and interdependence, in the quest for profit maximization. The view that corporations can make profits and do “good” should not be an empty slogan but a real practice. The issue of fair profits also tends to creep into pharmaceutical policy dialogue. This is raised primarily because of the corporate success of the research-based pharmaceutical industry. Critics of the pharmaceutical industry also focus on issues beyond the ethical problems associated with drug access. Drs. Arnold Relman and Marcia Angell (former editors of the New England Journal of Medicine) wrote a highly controversial article in which they criticized drug companies for lack of innovation and noted that most of the new drugs are simply copies of those which are already in the market (Relman and Angell, 2002). These types of drug are known by the industry as “me too” pharmaceuticals; many new innovative drug are based on government research. They are not alone in citing this point. The National Institute for Health Care Management (2002) reported that the majority of drug application approvals by the US Food and Drug Administration from 1989 to 2000 were for drugs that contained active ingredients already in the market.
Relman and Angell (2002) were also critical of drug company efforts to extend their patent rights through patent extensions, known as “evergreening”, in an effort to block competition from the production of less-costly generic drugs.
The TRIPS Agreement extended patent protection to a lengthy period of 20 years (prior to TRIPS, even the USA, which has had a robust patent regime for pharmaceuticals, had a shorter period for the patent life: 17 years). The TRIPS Agreement included and surpassed most of the past provisions of the international agreements on the protection of intellectual property rights (Schott, 2000). It required each member state to maintain sufficient procedures and remedies within its body of domestic law to ensure protection of intellectual property. These procedures and remedies must also be made available to foreign right holders.
We argue that the TRIPS Agreement is morally unsatisfactory because it does not help to improve global drug access even with the inclusion of its “safety valves.” For example, the Doha Declaration on the TRIPS Agreement and Public Health by the World Trade Organization (2001) and the implementation of paragraph 6 in August 2003 suggested a means for selective disengagement by permitting those countries that do not have the capacity to manufacture medicines to still use compulsory licensing by contracting-out agreements with firms in other countries. This unleashes the potential for more competition in the pharmaceutical market, more drug supply for those in need. For now, this is particularly relevant for antiretroviral therapy. Despite the positive outcome, the accord is limited by a number of administrative procedures, such as requiring both the importing and exporting countries to issue compulsory licenses, ensuring that the World Trade Organization is involved in the overseeing of the procedures, plus other stipulations; these effectively limit its application in countries.
There are a number of ways that the obligation to provide essential medicines to the developing world might be met (Cohen and Illingworth, 2003) by the private sector and also the healthcare professional. Those obligations fall on many different parties and are grounded in a variety of moral concerns. There are, in other words, enough moral obligations and responsibilities to go around. Similarly, there are a number of different ways that help can be rendered, such as through greater investment in infrastructure and the training and development of sufficient personnel to administer medicines to those who need it. Our obligations to the “distant needy” have been defended and are based on many different considerations, including, and perhaps most persuasively, that which states that those of us in the developed world have both inflicted harms on people living in the developing world and benefited from the corruption and inhumanity that exist there (Pogge, 2004).
We thus begin with the assumption that everyone in the developed world has obligations to those in the developing world (Pogge, 2004; Singer, 2004). The question is, then, whether or not pharmaceutical companies are for some reason exempt from these obligations. Arguably, pharmaceutical companies have a competing obligation to their shareholders that overrides the standing obligation all people have to those in the developing world (Friedman, 2004). We argue that while pharmaceutical companies do indeed have an obligation of loyalty to shareholders that obligation does not override the obligations they have to fulfill the right to essential medicines of people in the developing world. We reason that not only are pharmaceutical companies not exempt from the obligation shared by all in the developed world but, if anything, they have a special duty to provide medical aid, in the way of essential medicines, by virtue of the fact that the medical sphere is morally special. This imperative applies to both international and local pharmaceutical producers, the latter being major producers in many low- and middle-income countries, such as Brazil, India, and South Africa.
Corporate social responsibility is the obligation of corporations to do good and to confer benefits on the community: to give back to the community (Freeman, 2004). It implies a duty on the part of corporations to give, even when satisfying the duty may be inconsistent with the making of excessive profits. Corporate social responsibility can be justified on a number of different moral bases. It can, for example, be justified on the grounds of beneficence, the duty to do good and to avoid or prevent harm (Frankena, 1973). It could also be justified on a utilitarian basis, that corporate social responsibility will maximize good consequences, and has been justified on the basis of stakeholder obligations (Freeman, 2004). At present, few pharmaceutical corporations would quarrel with the need to engage in some kind of corporate social responsibility and, specifically, to contribute to world health (Mills et al., 2006). Indeed, many pharmaceutical companies already donate some essential medicines to those who need them in the developing world and include a statement about such giving in their corporate mission statements. Although we applaud these charitable acts of pharmaceutical companies, we do not think they go far enough, since premature and unnecessary death continues in such countries. Consequently, it may be that the mere act of giving, as a matter of corporate social responsibility, is not adequate to meet the rights to essential medicines of those in the developing world. By asking that pharmaceutical companies fulfill the duty to do good, we also argue that they need to modify their marketing practices particularly in developing countries so that healthcare workers are not unduly influenced to prescribe a particular drug.
There is certainly a moral right on the part of the world’s poor and sick, often children, to essential medicines, and that right is based on the dire urgency of the need. Many of the diseases that afflict those in the developing world are indirectly associated with poverty, some of which is historically linked to the adverse activities of the developed world (Pogge, 2004). In addition, as Thomas Pogge has argued, assisting the world’s poor is at least partially a negative duty to stop inflicting harms (e.g., sustaining corrupt powers).
When rights are at issue, considerations of justice demand enforcement of the rights (Ashford, 2007). Rights cannot be left to the whimsy of the supererogatory duties implicit in corporate social responsibility. Rights would seem to require that pharmaceutical companies set aside some of their property rights (e.g., patents) for the sake of those in the developing world who may not have a strict legal claim in that property. Patents are not the only problem for those in the developing world. Rights may require that pharmaceutical companies undertake research and development in order to identify treatment for neglected diseases.
There have been important approaches to creating ways to meet the right to essential medicines. Thomas Pogge (2004) has identified an interesting revision to the pharmaceutical incentive system that might overcome some of these incentive problems, and public–private partnerships suggest another way of meeting this problem (Light, 2006). Both these approaches, however, try to meet pharmaceutical companies on their own terms; that is, they try to appeal to the profit motive of pharmaceutical companies and their shareholders. This, of course, has the distinct advantage of providing an attractive, realistic, and potentially long-term solution to the problem. Although we applaud both of these approaches, we believe that it is important, nonetheless, to keep uppermost in our minds the deeply held moral conviction that people have a right to essential medicines. As a result, failure to provide them is a human rights violation. The language of human rights is important not only because it establishes the standard of justice to be invoked but also because it carries with it an important narrative meaning about our moral and perhaps legal obligations to the developing world.
The duty to help the developing world falls on many, including pharmaceutical companies (Scientific Organising Committee for the Montréal Statement, 2005). There are many reasons why pharmaceutical companies are obligated to meet these rights, many of which have been stated elsewhere (Cohen et al., 2006). Pharmaceutical companies not only share the same duty to help with all members of the global community but they also have an even higher responsibility. We argue that pharmaceutical companies as medical entities committed to human health have the duty to render aid to the sick. Healthcare needs, as well as the people and organizations that meet them, have heightened responsibilities. Medical needs are special and they have been uniformly recognized as special (UN Department of Public Information, 2005; WHO, 2006). In part, they are special because of the role they play in sustaining the lives of humans (Scientific Organising Committee for the Montréal Statement, 2005) and in maintaining the security, value, and integrity of those lives. Arguably, individuals and entities involved in the medical field incur certain special responsibilities because of the moral importance of medical needs. Physicians are expected to meet medical needs, such as providing emergency care, even when it is inconvenient, or they may be required to put themselves at risk in order to help others, as with contagions or bioterrorism.
Healthcare providers, unlike the common bystander, are presumed to be in a position to render reasonable aid. This important duty of medical providers also suggests that people’s physical well-being is valued morally, and because providers are well positioned to render medical aid, they have a duty to do so. (There is not, for example, and regrettably, such a duty to render IT services in the event of an emergency computer crash.) Arguably, the moral intuitions that underlie this duty should also hold true for pharmaceutical companies – unless they have a conflicting obligation that overrides this duty. Just as healthcare providers are required to render aid in an emergency, so, we believe, are pharmaceutical companies. Pharmaceutical companies, like physicians, have the knowledge and skills needed to meet important healthcare needs and rights. Both have a duty to ensure that pharmaceutical prescribing represents the right drug for the right person at the right time.
The dire need alone of the afflicted and dying in a global community should be a sufficiently compelling reason to have pharmaceutical companies act for the benefit of them. Of course, this reasoning could also be applied to other organizations with the unique wherewithal and skill set to render aid. Farmers, grocery stores, and other food purveyors, for example, are likely to have a duty to provide food to the global hungry. Indeed, such a duty was enacted in the USA at the national level with the Federal Bill Emerson Good Samaritan Food Donation Act (US Congress, 1996).
Just as physicians are asked, and expected, to put themselves at risk, to help the sick, it is reasonable to expect pharmaceutical companies to risk some profits in order to provide essential medicines to those in the developing world who will die without them. We believe that a moral paradigm shift is required to complement the needed revisions of the patent system, proposed by Pogge (2006) and others. That shift must include the conviction that rights trump profits. Such a right would, of course, extend beyond the case of pharmaceutical companies. It would also apply to healthcare plans such as managed care organizations. If, and especially in the healthcare arena, the best way to ensure that rights are not sacrificed to profits is through nationalized healthcare systems, such an approach would be morally required.
It would indeed be difficult to make the case that money is more important than saving lives. This is especially so if it were also the case that most of those profits were to fall on those who live in wealthy western countries and who have, in some sense and even if indirectly, caused the poverty and associated disease (Pogge, 2004; Ashford, 2007). There are no compelling arguments to justify putting money before lives.
One might argue in defense of pharmaceutical companies that they and their shareholders are entitled to these profits, and the actions that are necessary to yield these profits, because of an implicit or explicit agreement between shareholders and pharmaceutical companies. But are there not many reasons to think that, if this agreement unnecessarily entails that some people die while others line their pockets with corporate dividends, it is unconscionable. Although agreements are in general respected, in the case of necessities the courts have been more flexible, as they should be, and have set aside signed contracts that impair the “right” to necessities (Hennigsen v. Bloomfield Motors, Inc., 1960). Shareholders who benefit from the patent system, while part of an unjust system, may have an even greater moral responsibility for the harm that indirectly results from this system. In any case, as Elizabeth Ashford (2007) has so eloquently argued, there is good reason to think that many in the West are indirectly causally responsible for the denial of basic human rights.
It is important to keep in mind that physicians are professionals, and that they must at all times meet the high ethical standards of their profession. These standards can guide clinicians through the moral dilemmas posed by access issues, including those presented in the cases with which we began. Dr. D’s primary duty is to his patients’ welfare including cultivating and maintaining the trust between doctor and patient. Prescribing medicines on the basis of personal gain would jeopardize trust between patient and physician and is, therefore, unethical (Illingworth, 2006). Professionalism also includes a commitment to advocate on behalf of medical service, to patient welfare in general, and social justice worldwide. Given this, physicians and other providers can engage in activism directed at ensuring essential medicines worldwide.
We have argued that pharmaceutical companies, such as company E, have an obligation to aid the sick and dying in the developing world in much the same way that physicians have such a duty. We argued for this obligation on the basis that pharmaceutical companies have indirectly caused harm to those in the developing world; the conflicting duties that pharmaceutical companies have to shareholders are easily defeated by showing that the human right to basic necessities overrides shareholders’ rights to unlimited profits, and pharmaceutical companies (and their investors) have special duties in virtue of the medical mission. This also demands that pharmaceutical companies do not price products out of reach for those in need and also do not resort to unethical marketing practices such as through material incentives to those healthcare workers who are most susceptible. In addition, healthcare workers who prescribe medicines need to ensure that they are prescribing with the patient’s health as a priority and are not prescribing a product because of the influence of a particular pharmaceutical company. This involves ensuring that any interaction with the pharmaceutical industry does not represent personal gain.