Ethics Case Controversy
Eli Lilly Company has been under fire in recent days due to the rapid increase in insulin prices. Because of this, consumers of insulin are forced to pay these outrageous prices and are participating in unhealthy, and even deadly practices in order to save money. Eli Lilly Company has recently been on the defense due to the rapid increase in their insulin prices. Eli Lilly Company is a global pharmaceutical company held in Indianapolis, Indiana. Lilly is, by far, the largest producer of human insulin in the United States. Not only are they a nationally held company, Lilly also stretches globally having products sold in 125 countries around the world. Eli Lilly Company was founded in 1876 by Eli Lilly himself. Lilly was a veteran of the American Civil War, who in turn, began creating high-quality medicines. Like many pharmaceutical companies back then, Lilly started smaller and focused on creating sugar-coated pills, syrups, and elixirs. However, while Lilly has many products that are important in the health field, their largest and most important product is Insulin. In 1923, three scientists from the University of Toronto developed a treatment for diabetes known as ‘Insulin’(Insulin Nation). With this, Eli Lilly Company contacted these scientists and was able to produce their discovery on a mass scale. In the earlier days of this new discovery, the vials of insulin cost around $20. However, as years have passed, the price for Insulin under Lilly has increased rapidly. Normal inflation is expected, but in recent years the price has jumped to an outrageous price which is causing a plethora of issues for those affected by Diabetes. It is not as if Diabetes is some rare and scarce disease. There are a substantial portion of our U.S population of those who have this disease. In a 2015 study, 30.3 Million people or 9.4% of our population suffer from Diabetes.
Diabetes is most prevalent in the seniors with 25.2% or 12 Million of the 30.3 Million Nationwide who are ages 65 and older. While most of these are type 2 Diabetes, there still holds a large portion of youth and others who have type 1 Diabetes who were born with the disease. Each year, it is estimated that 1.5 Million Americans are diagnosed. With these statistics, it exhibits how prevalent Diabetes really is. It is no laughing matter. In 2015, Diabetes ranked the 7th leading cause of death in the United States with 79,535 deaths. While many view Diabetes as a non-lethal disease, they are incredibly incorrect. This is why Eli Lilly Company has been under fire in such a large proportion because people are beginning to question their ethical status and even their legality in their pricing of insulin. In our modern world, everything is seeming to cost more and more. However, the price of Insulin has reached an outrageous level topping out at $275 per vial.
These vials only last one week. So for an average person with diabetes it costs around $1000 every month to stay alive. As of March 22nd, 2018 the total costs of those with Diabetes had accumulated to 327 Billion. Eli Lilly may be to blame for these costs.
Since the year 2012, the price for their Insulin product ‘Humalog’ has dramatically risen. Because of this, many of those who rely on Insulin have begun to panic about the rising costs for the drug that keeps them alive. For many treatments for diseases, there are alternatives with prices that vary depending on how much an individual's income is. As for Diabetes, there is no alternative to insulin and all three of the insulin producers have their vials set at a price that is in the upper $200’s. This rapid growth in the prices of insulin has caused some very unhealthy habits in those who suffer from Diabetes. While many of those who suffer from Diabetes do not pay in full price for the treatment due to healthcare, there are a substantial amount of individuals who cannot afford healthcare and are forced to pay out of pocket. Even for those with the reduced costs from insurance, it still adds up to an amount that is overwhelming. While the Insulin is at a lower cost, those individuals or families still have to pay for their health insurance and deductibles for the treatment. So while the insurance covers part of the treatment, the costs of everything ad up. Due to this, those certain individuals who have difficulty putting out the money are starting to perform unhealthy and risky behavior in order to save money. The increased inflation in price has caused many people to ration their vials of insulin which is extremely unhealthy and can be life threatening. These circumstances have obviously caused outrage from all of those who suffer Diabetes and those who may have to pay for it for their children. One father, Clayton McCook shared his opinions stating, "It's really one of my greatest fears." Clayton has to meet a $3,000 annual deductible to cover medication and supplies for his diabetic 10-year-old daughter. "If insulin is $300 a vial now, what's it going to look like in 20 years when she's on her own”(axios)? Like Clayton, many other people are also worrisome of what the future holds. One can only imagine how much the price can expand. Because of this, organizations such as the JDRF and T1 International have formed in order to advocate for those who are suffering from this. In recent years, this story has garnered a lot of attention and Eli Lilly has heard the backlash from the public, and is being pressured into explaining why their prices have increased at such a substantial rate. Even President Trump has addressed this issue and has made it a priority to address. In February of last year, the Senate Finance Committee had sent a letter to Eli Lilly in order to uncover form them why their prices are increasing(ny times).”The letter noted that taxpayers spend more than $1 billion a year for Humalog through Medicare and Medicaid and said, “When one insulin product costs the taxpayer more than $1 billion in one year, the American people ought to know how the company prices its product.(ny times )” While Lilly and other major companies have stated that the insulin has gotten better, there is still no reason as to why it has risen to such a degree and the people have a right to know why it has. In recent days, Eli Lilly has responded to the backlash. “There are clearly patients who, despite many best efforts, are struggling to afford their insulin,” David Ricks, the chief executive of Lilly, said in an interview Friday. “This is a step we can take to close part of that remaining gap(ny times).” With this, on March 4th 2019, Eli Lilly company released an “authorized generic” of Humalog 100 for half the price of its original list price. An authorized generic means that, except for the label, it is identical to the brand-name drug and manufactured in the same facilities. The new product, which the company said would be made available as quickly as possible, will be called Insulin Lispro(ny times).
Eli Lilly Company has been under fire in recent days due to the rapid increase in insulin prices. Because of this, consumers of insulin are forced to pay these outrageous prices and are participating in unhealthy, and even deadly practices in order to save money. Eli Lilly Company has recently been on the defense due to the rapid increase in their insulin prices. Eli Lilly Company is a global pharmaceutical company held in Indianapolis, Indiana. Lilly is, by far, the largest producer of human insulin in the United States. Not only are they a nationally held company, Lilly also stretches globally having products sold in 125 countries around the world. Eli Lilly Company was founded in 1876 by Eli Lilly himself. Lilly was a veteran of the American Civil War, who in turn, began creating high-quality medicines. Like many pharmaceutical companies back then, Lilly started smaller and focused on creating sugar-coated pills, syrups, and elixirs. However, while Lilly has many products that are important in the health field, their largest and most important product is Insulin. In 1923, three scientists from the University of Toronto developed a treatment for diabetes known as ‘Insulin’(Insulin Nation). With this, Eli Lilly Company contacted these scientists and was able to produce their discovery on a mass scale. In the earlier days of this new discovery, the vials of insulin cost around $20. However, as years have passed, the price for Insulin under Lilly has increased rapidly. Normal inflation is expected, but in recent years the price has jumped to an outrageous price which is causing a plethora of issues for those affected by Diabetes. It is not as if Diabetes is some rare and scarce disease. There are a substantial portion of our U.S population of those who have this disease. In a 2015 study, 30.3 Million people or 9.4% of our population suffer from Diabetes. Diabetes is most prevalent in the seniors with 25.2% or 12 Million of the 30.3 Million Nationwide who are ages 65 and older. While most of these are type 2 Diabetes, there still holds a large portion of youth and others who have type 1 Diabetes who were born with the disease. Each year, it is estimated that 1.5 Million Americans are diagnosed. With these statistics, it exhibits how prevalent Diabetes really is. It is no laughing matter. In 2015, Diabetes ranked the 7th leading cause of death in the United States with 79,535 deaths. While many view Diabetes as a non-lethal disease, they are incredibly incorrect. This is why Eli Lilly Company has been under fire in such a large proportion because people are beginning to question their ethical status and even their legality in their pricing of insulin. In our modern world, everything is seeming to cost more and more. However, the price of Insulin has reached an outrageous level topping out at $275 per vial.
These vials only last one week. So for an average person with diabetes it costs around $1000 every month to stay alive. As of March 22nd, 2018 the total costs of those with Diabetes had accumulated to 327 Billion. Eli Lilly may be to blame for these costs.
Since the year 2012, the price for their Insulin product ‘Humalog’ has dramatically risen. Because of this, many of those who rely on Insulin have begun to panic about the rising costs for the drug that keeps them alive. For many treatments for diseases, there are alternatives with prices that vary depending on how much an individual's income is. As for Diabetes, there is no alternative to insulin and all three of the insulin producers have their vials set at a price that is in the upper $200’s. This rapid growth in the prices of insulin has caused some very unhealthy habits in those who suffer from Diabetes. While many of those who suffer from Diabetes do not pay in full price for the treatment due to healthcare, there are a substantial amount of individuals who cannot afford healthcare and are forced to pay out of pocket. Even for those with the reduced costs from insurance, it still adds up to an amount that is overwhelming. While the Insulin is at a lower cost, those individuals or families still have to pay for their health insurance and deductibles for the treatment. So while the insurance covers part of the treatment, the costs of everything ad up. Due to this, those certain individuals who have difficulty putting out the money are starting to perform unhealthy and risky behavior in order to save money. The increased inflation in price has caused many people to ration their vials of insulin which is extremely unhealthy and can be life threatening. These circumstances have obviously caused outrage from all of those who suffer Diabetes and those who may have to pay for it for their children. One father, Clayton McCook shared his opinions stating, "It's really one of my greatest fears." Clayton has to meet a $3,000 annual deductible to cover medication and supplies for his diabetic 10-year-old daughter. "If insulin is $300 a vial now, what's it going to look like in 20 years when she's on her own”(axios)? Like Clayton, many other people are also worrisome of what the future holds. One can only imagine how much the price can expand. Because of this, organizations such as the JDRF and T1 International have formed in order to advocate for those who are suffering from this. In recent years, this story has garnered a lot of attention and Eli Lilly has heard the backlash from the public, and is being pressured into explaining why their prices have increased at such a substantial rate. Even President Trump has addressed this issue and has made it a priority to address. In February of last year, the Senate Finance Committee had sent a letter to Eli Lilly in order to uncover form them why their prices are increasing(ny times).”The letter noted that taxpayers spend more than $1 billion a year for Humalog through Medicare and Medicaid and said, “When one insulin product costs the taxpayer more than $1 billion in one year, the American people ought to know how the company prices its product.(ny times )” While Lilly and other major companies have stated that the insulin has gotten better, there is still no reason as to why it has risen to such a degree and the people have a right to know why it has. In recent days, Eli Lilly has responded to the backlash. “There are clearly patients who, despite many best efforts, are struggling to afford their insulin,” David Ricks, the chief executive of Lilly, said in an interview Friday. “This is a step we can take to close part of that remaining gap(ny times).” With this, on March 4th 2019, Eli Lilly company released an “authorized generic” of Humalog 100 for half the price of its original list price. An authorized generic means that, except for the label, it is identical to the brand-name drug and manufactured in the same facilities. The new product, which the company said would be made available as quickly as possible, will be called Insulin Lispro(ny times).
Stakeholders
There are four stakeholders that are involved in this case. First, are the insulin producing companies known as Eli Lilly Company, Sanofi, and Novo Nordisk. Next is those who purchase the insulin whether it'd be for themselves or for a family member. The third stakeholder is John Lechleiter who is the CEO of Eli Lilly, and finally, the last stakeholder are insurance companies who are said to have been a major reason as to why the prices have skyrocketed.
There are four stakeholders that are involved in this case. First, are the insulin producing companies known as Eli Lilly Company, Sanofi, and Novo Nordisk. Next is those who purchase the insulin whether it'd be for themselves or for a family member. The third stakeholder is John Lechleiter who is the CEO of Eli Lilly, and finally, the last stakeholder are insurance companies who are said to have been a major reason as to why the prices have skyrocketed.
Individualism
By any means, what Eli Lilly is doing can be seen as wrong and unjust. However, under Individualism it is important to only operate under this theory and forget whatever feelings or morals you may hold. Individualism states that as long as what a company is doing is legal then it is fair game. With this theory, there is no morality involved and is solely focused on profit. The main motivator in Individualism can be seen as egoism and selfishness. The goal of Individualism is to maximize profits which in turn holds some sense of egoism by not letting others interfere with how you are making the profit or what to do with your money. With this though, it must be legal as to how you are obtaining and distributing your profits. Ultimately, we must respect an individual's right to choose. Correlating this view to the case of Eli Lilly, it is unclear as to why the prices have risen in the first place. It was generally stated though how companies have responded stating how insurance middleman have been taking larger and larger cuts of Insulin through rebates causing the price to increase dramatically. With the prices going up, in 2017 Eli Lilly was taken to court with some believing it is illegal as to what they are doing. With Individualism, this is the deciding factor as to if Eli Lilly is actually being unethical and should be held responsible here. However, as the case transitioned to District Court for the district of New Jersey. With this motion of transfer, charges were dismissed and Eli Lilly was not convicted on any charges. The court case stated, “Defendants contend that this Court should dismiss Counts One and Two of Plaintiff's' Complaint, which allege violations of the Racketeer Influenced and Corrupt Organizations Act(case 208).” While the prices have risen dramatically in recent times, it was deemed before that they were not committing any crime. While it may be difficult to see this as ethical, Individualism does. With insurance middle men taking cuts, Eli Lilly has had no choice but to increase their prices in order to maintain some sort of profit. This action taken by them is understandable under Individualism, and violates no part of the theory.
Utilitarianism
Utilitarianism deals with everything that has to do with happiness. Through Utilitarianism, all actions aim at something that’s good. While it is important to maximize happiness in yourself or others, Utilitarians believe that you must maximize happiness in both. Not only does this theory apply to humans, but it also applies to any being that is capable of feeling emotion. As in the Eli Lilly case, we can anyone Utilitarianism by examining if each stakeholder is “happy” with the actions of Eli Lilly. The company and former CEO John Lecheiter themselves are not happy overall. While they are making money, they have openly stated how it is not their intention for the prices to be so high but it is because of insurance companies and middlemen driving up deductibles. The next stakeholder are people who consume the insulin or those who buy it for someone else. These stakeholders are definitely not happy because they are forced to pay such high prices for a treatment that keeps them alive. Insurance companies are the next stakeholder to be examined. This is the only stakeholder where they can be considered “happy” because no one is taking the flake out on them and they are profiting as they continue to indirectly raise the prices. With all this information, through Utilitarianism, Eli Lilly is operating unethically because not every stakeholder is happy. While one stakeholder is, all need to be considered happy in order for something to be ethical in a Utilitarianists eyes.
Kantianism
Kantian Theory's main value is to give correct information and information people and respecting the autonomy in their lives. With this, it is up to the individual as to what they choose. No one can choose for another person and each of us have morality and have to think what is right for us. With this being the most crucial value to Kantian Theory, there are also 4 principles of Kantianism that I will be able to examine to see if Eli Lilly Company acted ethically or not First, act rationally. Second, allow and help people to make rational decisions. Third, respect people, their autonomy, and individual needs and differences., Finally, be motivated by Good Will, seeking to do what’s right because it is right. To start, Eli Lilly company did deceive their customers. While they did not receive them on the prices going up, they did deceive them as to why. Only after constant negative attention from media did Lilly respond to the comments even though this has been occurring for over 7 years. Eli Lilly Company does not reflect any of the principles of Kantianism. They did not act rationally but continuing to rise the prices, they weren't able to help people make the right decisions, they didn't tend to individual differences and needs, and they seemed to only be in it for the profit and were not operating on Good Will. Another main aspect to Kantianism is the Formula of Humanity. This formulation states, “Act in such a way that you treat humanity, whether in your own person or in the person of another, always at the same time as an end and never simply as a means.” The big question here in analyzing this case is if Eli Lilly used the buyers of insulin as a means to their profit? The answer to this is yes. While they publicly stated it was not all their doing as to why the prices skyrocketed, they still did not tend to the needs of their customers and continued on this path for more than 7 years without supplying any cheaper alternatives. Instead, Lilly kept their one insulin package forcing the public to only being able to purchase that single one making profit for Eli Lilly. Overall, with all that was examined, Eli Lilly acted unethically under Kantianism after deceiving customers, having no Good Will, and by not following the formula of humanity.
Virtue Theory
Virtue Theory deals with the four main characteristics that comprise virtue. These characteristics are courage, honesty, temperance, and justice. With all these characteristics, Eli Lilly company did not fulfill a single one of them. For courage, someone is supposed to go against their fears, and do what is right even though it may be difficult at first. Eli Lilly showed no courage by trying to adhere to the complaints of the people, and change their mission as a business by lowering their prices. As for honesty, Lilly also is unfulfilling in this category. Lilly actually deceived customers by not explaining as to why the prices have increased so rapidly which goes against the characteristic of honey. Next, Eli Lilly displayed no temperance or self-control. When the situation arose, they should have noticed what was currently happening and changed their ways. However, they were indulgent and were solely trying to profit even though they have known what they were doing was wrong. Finally, while Eli Lilly’s actions were not illegal, they were not fair or just. The people’s voices were not taken into consideration and were silenced by Lilly. The products of are good quality, however, Eli Lilly was not just in consideration of the people. Overall, Eli Lilly was not virtuous. While at times these characteristics may have shown through, in all, they failed to completely meet these values and can be seen as unethical in this case.
Justification Ethics Evaluation
Each ethical theory found Eli Lilly except for Individualism. This was because it was technically not illegal as to what Eli Lilly was doing in this case. However, it was unethical in each of the three other theories. Because of this, and due to my own opinions, Eli Lilly was unethical here. They were deceiving, untruthful, and uncaring in general to the whole situation. Action was only taken 5 years into the making of this disaster when the company started to receive a plethora of negative attention. In my view, this was fake and they were only trying to protect their image. With people actually dying from what they did, and from Eli Lilly being unethical in Kantianism, Utilitarianism, and Virtue Theory, they are unethical in my opinion.
Action Plan
There are a plethora of issues surrounding Eli Lilly currently. The skyrocketing of inulin prices has driven the public to criticize the company to a level that the company had never seen before. At prices of $275 per vial, consumers are forced to pay this outrageous price in order to stay alive. Not all people have this kind of money either. Having to pay $1000 every month is draining people’s bank accounts and people are resorting to other practices in order to try and save their money. These groups of people are rationing their insulin supplies by taking smaller amounts per month to save money. This is dangerous and life threatening and aren't practices that diabetics should be participating in. All of this has caused outrage of those protesting for a cheaper alternative. This is why Eli Lilly needs to produce a cheaper alternative for at least half the cost of $137 their consumers in order to limit health risks by rationing vials. My new plan for Eli Lilly will promote profit and productivity within the company. By creating cheaper alternatives, Lilly will gain the trust of their customers allowing them to have a loyal customer base that will pay for future medications that Lilly releases. This will drive in profits for their company as more people will buy their vials of insulin at a normal rate. Profits is the largest piece to any business and is what makes them run. Even though they are not selling their vials at $275, by cutting the prices, more people will buy their vials and even out the profits if they were to sell them at the original price of $275. By also creating a new mission statement and workplace environment, Lilly will have passionate and driven employees who are willing to work towards the goal of the company increasing productivity. With all of this, Eli Lilly company will embody integrity by being transparent to its customers, will produce high-quality medicines, and will continuously self-improve by learning from their mistakes and act in an ethical manner to be able to save the millions of lives through their work.
Works Cited
- Thomas, Katie. “Eli Lilly Will Sell Half-Price Version of Humalog, Its Popular Insulin.” The New York Times, The New York Times, 4 Mar. 2019, www.nytimes.com/2019/03/04/health/insulin-price-humalog-generic.html.
- Herman, Bob. “The Outrage over Insulin Prices.” Axios, 25 Oct. 1970, www.axios.com/outrage-prescription-drugs-insulin-prices-7a9c0a90-9329-4214-9ab9-b11d45578f51.html.
- Editor. “How Insulin Became So Expensive - A History.” Insulin Nation, Insulin Nation, 29 June 2017, insulinnation.com/treatment/how-insulin-became-so-expensive-a-history/.
- “Statistics About Diabetes.” American Diabetes Association, www.diabetes.org/diabetes-basics/statistics/.
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