Eli Lilly: The Epidemic on Type 1 Diabetics and Rising Prices of Insulin (2012-Present)

ETHICS CASE CONTROVERSY

ADA Findings in List and Net prices of Insulin

Eli Lilly is one of three major pharmaceutical companies that produces the greatest amounts of insulin that is available in the current market in the United States. Insulin is the major medication for the treatment of Type 1 Diabetes, and without this medication Type 1 Diabetics would not survive. Type 1 Diabetes is a chronic illness where your pancreas cannot properly control the amount of blood glucose in your body, and must require daily injections of insulin to maintain a healthy life. Insulin is a hormone that is created by the pancreas to help with the exchange of glucose from food into energy. Currently, the insulin industry has a net worth of approximately $22 billion, where the price of a vial of insulin has grown from $1.49 in 1972 (worth of $8.86 today) to a price of $300 in 2004 (a $60 worth in 1972). There are 1.5 million new cases of diabetes every year, while it is the 7th leading cause of death in the USA. Based in 2015 statistics, 252.806 Death Certificates listed Diabetes as an underlying or contributing cause of death. When the rising prices were making a larger headway into the media, as mentioned before the ADA’s Working Group was created in order to analyze the insulin industry, and to figure out why the prices have raised so drastically. They found that in a 10-year span that the net price of insulin has raised by 57%, but the List price, or the price on the market, increased by 252%.

Eli Lilly is one of the three largest pharmaceutical companies that produce the majority of insulin in the USA. Eli Lilly currently sells products in 125 countries around the world. Eli Lilly was founded in 1876 by Eli Lilly and it was one of the first companies to produce human insulin. Pharmaceutical companies do not make the process of how money goes through transparent to the public. It wasn’t until the ADA’s Working group that they were able to analyze and publicly show how money is processed through the pharmaceutical companies. Money can passed through different channels through wholesalers, pharmacies, drug companies are more.

Currently, people are either struggling, or cannot afford their medication all together. In order to survive some have resorted into rationing their medication so it could last longer, therefore costing them more money. Unfortunately, missing even one dosage can be life-threatening, and even fatal. One person had even stated previously that when they bought a 90-day supply in 2017 it cost them approximately $300 dollars, but when going back after the first of 2018 the cost of the same 90-day supply increased to $900 dollars. With such a sudden increase, this individual could only get a 30-day supply using a coupon at Walmart, still unsure if they were going to be able to afford getting another supply in 30 days.

STAKEHOLDERS
With a company as large as Eli Lilly, there are many stakeholders in this situation. To start at the top of the food chain there is the Top Executives of Eli Lilly as they are the owners of the company in question. Other stakeholders in the pharmaceutical business is Pharmacies, Drug Wholesalers, and Insurance companies. For a less profitable group Emergency Medical Services are a stakeholder because they have to carry insulin on their ambulances at all times in case of a diabetic emergent patient. For people who are directly affected, thus are stakeholders are Parents/Guardians/Families of Type 1 Diabetics and the diabetics themselves because they are the one purchasing the medication.

Eli Lilly current CEO (left) and previous CEO (right)

INDIVIDUALISM
  Individualism is an ethical theory that focuses more on the stakeholder than the consumers. With and individualistic view, the main goal of a company is to maximize profits for owners as long it is within the rules of the land. In this case, the laws created by the US Government. Individualism is an ethical outlook where no morality should be involved with the exception of the law. This ethical theory also focuses on respecting the individual’s right to choose by not promoting them self as “Eco-friendly” but only promoting them self as the best product to choose because they are the best product. Egoism and Selfishness are not looked down upon in this ethical theory. This ethical theory looks at “minimal morality” as enough for being ethical. Minimal morality is respecting the minimum of people and their right to choose. This means now swaying their opinions with any fact other than the facts of the product. When analyzed through an individualistic view, Eli Lilly has done nothing unethical with their rising prices of insulin. They have done exactly what and individualist would expect them to do for their company. They have maximized profits for their owners and have made decisions based on what is best for the company. They currently have not been found guilty in the court of law, thus they have not broken any laws within the USA. Therefore, Eli Lilly is seen as ethical in an Individualistic view.

UTILITARIANISM
In Utilitarianism, the focus of this ethical theory is to maximize happiness and pleasure for all moral beings. A moral being is someone or something that can feel pleasure and pain. For example, people, the stakeholders, and even animals are all examples of stakeholders. In order to determine if Eli Lilly was ethical or not, each stakeholder in this situation must be analyzed to see if their happiness has been maximized or not. To start Drug manufacturers such as Eli Lilly had an increase in happiness in the beginning because their profits were maximized, and the company has been thriving. Pharmacies across the country have also had an increase is happiness due to the increase in profits through sales of insulin in the beginning of the increase in product prices. The family and friends of Type 1 Diabetics have had a drastic decrease in happiness due to seeing their friend or family member struggling with the high prices of medication. They may even be personally responsible with purchasing the medication, in the case of parent and child, so they also have a decrease in happiness. The stakeholder who has taken the greatest loss in happiness is people who have been diagnosed with Type 1 Diabetes. Based on Utilitarianism ethics, Eli Lilly would be found unethical in this situation. With some parties maximizing their happiness, all parties have had a loss in happiness. In the end, Eli Lilly is seen as unethical within the view of Utilitarian Ethics.

KANTIANISM

ADA Working Group Findings for Insulin Industry

Kantian Ethics focuses on the person them self, and their ability to make a clear, conscious decision for them self. This means, this ethical theory promotes transparency, the idea of “Humanity as an end in itself”, and the directness of information. A Kantian's point of view heavily focuses on if someone is deceitful, as that would be immediately seen as unethical. Deceit does not necessarily mean and a direct lie. It can be in different forms like withholding information or skewing it to sway a person’s opinion. In the case of Eli Lilly, they were not transparent when it came to the process of how money is passed through the pharmaceutical business. It was only when the Working Group came out with their findings that a diagram was created to see the exchange of money. With this fact, Eli Lilly can be seen as unethical due to their non-transparency with their information for consumers when purchasing their product. If analyzed with the Formula of Humanity, Eli Lilly when pricing their product seemed to make prices based on their deficit that had a few years back and tried to make money back. This means they priced their product to use their consumers as a “means” to making a profit and not the “final end” that they should have, This is another way Eli Lilly can be proven unethical through Kantian Ethics.

VIRTUE THEORY
Virtue Theory is an ethical theory the analyzes the situation in four main categories individually, where these four categories are called virtues. The four main virtues are courage, honesty, temperance/self control, and justice/fairness. Courage can be described as the wanting to stand up for right ideas or actions. Honesty is “in agreements, hiring and treatment of employees, customers and other companies” (Salazar). Temperance can be seen as the self control of making selfish decisions. Finally, Justice/Fairness which is hard, high quality work, being fair, and practicing fairness. Eli Lilly, in this situation does not show courage because they play it safe through their financial crisis. Instead of trying to keep prices down and possibly taking a financial hit, they decided to up the prices of insulin to save the company. Eli Lilly also did not show the values of honesty, as they were no transparent with how money is transferred in the pharmaceutical business. When talking about temperance, Eli Lilly did not show self control to make the selfish decision of raising prices of insulin. Finally, Eli Lilly did not show fairness to those who were already struggling to make ends meet with affording their medication, and continue to raise the prices of insulin. Since Eli Lilly did not show any of the four main virtues, they would be found unethical in this situation.

JUSTIFIED ETHICS EVALUATION

Personally, I have a view that almost a mixture of Kantianism and Utilitarianism. I believe that human life should be values over any and all decisions. Like Utilitarianism, is someone is being hurt by the situation, in this case Type 1 Diabetics, then clearly there is something wrong with the system and something must be changed. I believe that minimal morality is a standard that should be made higher to be more maximized morality. Meaning, human rights and lives are values at the highest possibility when making a decision. I also agree with Kantianism where information should be made transparent and people are given the ability to make the best decision possible. Although sometimes I do not agree with people’s decisions, I do believe people should still have the right to make them based on their own morals. With this in mind, I do believe that Eli Lilly should be found unethical in this situation with their rising prices, and should immediately make changes to make medication more affordable to people. Although they have been making a few steps in the right direction with coming out with a “generic” medication, they should still strive to make their medications more affordable. I personally find that humanity should be the end goal of all decisions and I find the most priceless thing you can have is a human connection with someone.

Eli Lilly Company Headquarters

COMPANY ACTION PLAN

The current issue is that the medication is not affordable to the common man. In order to lessen prices, there are two different ways they can go about this. They can either do what they have already done which is to make a more affordable “generic” version of the medication so there is one available for people to purchase. Another thing they can do is create a working group within the company in order to find ways to cut back on the pricing of the medication. This working group should be created to work once every 5 years, and study data from a 6 moth period. With this information they can give a recommendation on how to cut back pricing, evaluate vendor prices, manufacturing prices, and other costs that they have control of when making and selling this product. To make this situation more ethical, they should be more open with the public about their progress to lessen the prices of their medication, and have more information available to them. By giving people more information, the company seems more open and instead of protesting if people have a problem they can address the company directly in a more calmly manner.

If Eli Lilly were to re-market the company as affordable and innovative, customers are more likely to make repeated purchases from the company versus trying to go to competitors to find a more affordable purchase. By also making the medications more affordable, it can be seen as also making the company more “ethically correct”. Currently, Gen Z is the taking over the consumer market, and Gen Z is the generation that focuses more on activism and wants to support ethical companies, despite if they have the better product or not. By marketing the company as more ethically correct and making medications affordable to the common man, you are marketing to Gen Z’s morals, and therefore creating a reliable customer pool.

Autumn Kelly

REFERENCES

American Diabetes Association. “Statistics About Diabetes.” American Diabetes Association, 22 Mar. 2018, www.diabetes.org/diabetes-basics/statistics/.

Bureau of of Community Health and Prevention. “Massachusetts Diabetes Data.” Mass.gov, 2019, www.mass.gov/service-details/massachusetts-diabetes-data.

Cefalu, William T., et al. “Insulin Access and Affordability Working Group: Conclusions and Recommendations.” Diabetes Care, American Diabetes Association, 1 June 2018, care.diabetesjournals.org/content/41/6/1299.

Idlebrook, Craig. “How Insulin Became So Expensive - A History.” Insulin Nation, Insulin Nation, 29 June 2017, insulinnation.com/treatment/how-insulin-became-so-expensive-a-history/.

Lechleiter, John C. “Eli Lilly CEO: 'We Are Stepping up Our Engagement'.” Indianapolis Star, IndyStar, 11 Sept. 2015, www.indystar.com/story/opinion/2015/09/11/lilly-ceo-stepping-engagement/72059198/.

National Institute of Diabetes and Digestive and Kidney Diseases. “Diabetes Overview.” National Institute of Diabetes and Digestive and Kidney Diseases, U.S. Department of Health and Human Services, www.niddk.nih.gov/health-information/diabetes/overview.