Gilead: The high price of COVID-19 drug that the government already paid for. (June 2020)

    

Gilead Sciences, Inc. is a research-based biopharmaceutical company that discovers, develops and commercializes innovative medicines in areas of unmet medical needs around the world, like COVID-19. Their antiviral drug, remdesivir, has become the first known medicine that has shown to have an impact on COVID-19. In June, Gilead announced that they were pricing remdesivir at $390-$520 per vial. This caused controversy to occur because many people believed that the government was responsible for creating this drug, due to the amount of funding they put into its research.

This case will be analyzed by four ethical theories, and each will determine, under their respective theory, if Gilead’s decision was ethical or unethical. First we will look at this case from the Individualism perspective. An individualist would find this decision to be ethical because Gilead is maximizing profit with their high price, and they are doing so within the law. Utilitarianism is the next theory, and a utilitarian would find this case to be unethical because Gilead is making a lot of people unhappy with their decision, especially taxpayers and patients with COVID-19. Kantianism is the third ethical theory, and I believe that Kant could be split between determining if Gilead’s decision was ethical or unethical because one could argue that Gilead is not treating its customers rationally, and one could argue that they haven’t done anything wrong. The fourth and final ethical theory is Virtue Theory, and a virtue theorist would argue that the actions of Gilead are unethical because of the lack of prudence and justice that Gilead has shown its customers with its decision.  

In the future, Gilead should look into re-evaluating the actual cost to make the drug and reference that when coming up with a new price. Gilead must lower the cost per vial of their drug in order to meet the needs of its consumers.

Small timeline of events that brought light to Remdesivir.

CASE CONTROVERSY

Gilead sets a high price on antiviral drug that the government paid for. (June 2020)

Gilead’s antiviral drug, Remdesivir, has become the first known medicine that has shown to have an impact on COVID-19. In February 2020, The National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health(NIH), sponsored and conducted a clinical trial that involved 1063 patients to evaluate Remdesivir for COVID-19. According to NIH’s clinical trial “Preliminary results indicate that patients who received Remdesivir had a 31% faster time to recovery than those who received placebo. Specifically, the median time to recovery was 11 days for patients treated with Remdesivir compared with 15 days for those who received placebo.”(NIH 2020) Remdesivir hasn’t proven to reduce the risk of dying for patients with COVID-19, but it has shown to help seriously ill patients recover from the virus more quickly. Two days after the positive results from NIH’s trial, the FDA issued an emergency use authorization for Remdesivir, allowing Remdesivir to be administered by healthcare providers to treat suspected or laboratory-confirmed COVID-19 in adults and children.(FDA 2020) In May, Gilead entered into an agreement with the U.S. Department of Health and Human Services (HHS) whereby HHS will manage allocation of donated vials of Remdesivir to hospitals until the end of September.  According to HHS, from the beginning of may till the end of September Gilead will be committed to donating their fist 1.5 million doses worldwide. More than 500,000 of those vials have been secured by the Trump Administration first in order to supply U.S. hospitals that are in need of a treatment for its patients.(PHE 2020)  After this period, once supplies are less constrained, HHS will no longer manage allocation and Gilead will be allowed to start commercially selling Remdesivir directly to hospitals and patients in need.(HHS 2020)  

A concealed vial of the antiviral drug, Remdesivir

As you can see, Gilead has not been alone in the development of Remdesivir. Prior to this pivotal trial, government scientists and agencies have been heavily involved in researching and developing Remdesivir. Although Gilead has been working on Remdesivir for almost a decade prior to any government involvement, it is the government, now, that is doing all the heavy lifting for Gilead. The U.S. government has funded many trials leading up to the pandemic. The final thing left to do for Gilead was to set the price for the antiviral drug, and that is where the controversy started.  

In an open Letter from the Chairman & CEO of Gilead Sciences, Daniel O’Day explains the company’s decision of how they came to a price for Remdesivir. O’Day states “In the U.S., the same government price of $390 per vial will apply. Because of the way the U.S. system is set up and the discounts that government healthcare programs expect, the price for U.S. private insurance companies, will be $520 per vial.” The majority of patients are expected to receive a 5-day treatment course using 6 vials of Remdesivir, which equates to $2,340 per patient, or $3,120. O’day believes that the company has discounted the price to a level that is affordable for developed countries with the lowest purchasing power. This means that countries around the world have access to purchase the drug, at what the company thinks is the most reasonable price.(Gilead 2020)  

Though the company may feel that the price is reasonable, Gilead received a load of negative publicity for the pricing of Remdesivir, with people saying that it is way overpriced, it should be free to taxpayers, and that taxpayers shouldn’t have to pay a dime to the company because they've funded most of their trials and research. According to a Public Citizen article, Public Citizen estimates that taxpayers are contributing at least $70.5 million to develop Remdesivir. (Public Citizen 2020) They believe that taxpayers are taking a significant risk because they are going to have to pay for something they already paid for. The public feels as if Gilead is just capitalizing on the work that was done by government scientists.  

Another issue that arose after the company’s announcement of their price was the price difference between having private insurance and not. The way America’s system is set up, people who are insured by a private insurance company will have to pay the extra $780 to cover the cost of the treatment. It is not Gilead's fault for the switch up in price, though they are the ones who set the price, it is up to the insurers to determine how much of the cost they are willing to cover. Gilead claims its price for Remdesivir is "well below" the drug's value, citing an estimate of $12,000 in hospital savings for each patient discharged four days early. However, the company's pricing overlaps with what the Institute for Clinical and Economic Review, an influential drug price watcher, estimates would be cost effective for the drug. In an article that analyses pricing models for Remdesivir as a treatment for COVID-19, ICER estimates Remdesivir would only be cost effective at a price of $310. ICER estimate of Remdesivir is about 10 times lower than the price Gilead set for the drug. (ICER 2020)  However, ICER assumes Remdesivir helps patients hospitalized with COVID-19 survive, which is a benefit that has not yet been proven in any other drug. Despite the outrage about the price, Gilead still believes that all patients will have access to Remdesivir.

Gilead Science's Chairman and CEO, Daniel O'Day

STAKEHOLDERS

There are a few important groups that are stakeholders in this case. Many people will be affected by the price that Gilead has set on Remdesivir. The main stakeholder in this case is the company, and the CEO, Daniel O’Day. Their decision will affect many things related to how to price a drug that is useful during a worldwide pandemic. There was no playbook for the company to follow when coming to this decision, so it was very hard for them to determine what the right price should be.(Gilead 2020) One group that may not be happy with Gilead’s decision are the investors, or stockholders. When the company announced its price, Gilead faced a large number of complaints which brought a lot of negative publicity to the company.

 This can negatively impact the price of the stock and cause it to decrease, which is not ideal for someone already invested into the company. Another group affected by the newly set price is private insurers. Patients that are insured by private insurance companies are to pay the higher price of $520 per vial instead of the lowest price of $390 per vial. They have to pay up to 33% more than the actual cost, and it is up to the insurers to decide how much of the cost they will cover for the treatment. The government is another stakeholder in this case because of their heavy involvement in the research and development of Remdesivir. Since they have been so deeply involved, people are trying to push the government to be more aggressive in trying to lower the cost to make it more affordable for citizens. One of the most important groups that are stakeholders in this case are patients with COVID-19. The price affects patients because the cost is so expensive that it may be hard for some to be able to afford it. During a pandemic, many people have gone unemployed and so affordability is a very big issue for patients who are in need of some sort of treatment to help them recover. Without the help from the government, or insurance, it will be very hard for some to be able to afford to pay for the 5-day treatment. This also includes taxpayers, who are not happy with the price and feel that they shouldn’t have to pay for the drug twice. They don’t feel that they are being compensated for funding most of the research that went into the development of Remdesivir.

INDIVIDUALISM

The only goal, according to Milton Friedman’s Individualism, of business is to maximize profit for the owner of the stockholders within the law of the land. (Salazar, 17) Tibor Machan tells us the same thing about Individualism. However, Machan says that at times the direct goal of profiting may need to be met by other indirect goals not aimed at profiting. He also says businesses, at times, may have other goals that may be prioritized over profit maximization.  In this case, Gilead has set a high price for Remdesivir, a COVID-19 drug that the Government paid for. According to the theory of Individualism, Gilead Sciences, Inc. has maximized profits in this case. Gilead’s obligation to the world is to provide them this drug at a reasonable value. Now some don’t feel that the price is reasonable whatsoever at the price of $390 or $520 per vial. Along with the price, many are upset that Gilead is allowed to set the price and not the Government. Government scientists and agencies were alongside Gilead almost every step of the way in the development and research for Remdesivir. However, Gilead has all the rights to Remdesivir, so the government has no say in what their price should be for the drug, they can only ask them to lower it. So, in this case, Gilead is maximizing profit by setting the price of Remdesivir at what they believe is the best possible value, and they are doing so within the law. An Individualist would consider Gilead's decision permissible, and therefore, ethical.

UTILITARIANISM 

The goal of Utilitarianism, according to John Stuart Mill, is to maximize happiness for all conscious beings in a long-term period, not just for one individual or one company, that are affected by the business action (Salazar 19). Applying the theory of utilitarianism to this case, a utilitarian would say that Gilead's pricing on Remdesivir is unethical. If you take a look at the stakeholders in this case, you can see that taxpayers are very unhappy with the price. Citizens are unhappy about the company’s price on Remdesivir because it is way too expensive. Being in the midst of a global crisis, the people feel that the company should have taken a lot more into consideration when figuring what the best value for it was. Although, the company did say that they have discounted the price to a level that is affordable for developed countries with the lowest purchasing power.(Gilead 2020) However, they were mainly focusing on making sure that most of the world has access to Remdesivir, and not worried about the people who actually contributed and funded a lot of the development and research for the company’s drug. As for the patients who are suffering from the virus and are in need of treatment, ones who are insured by a private company will be paying the higher price of the two. Patients are unhappy at having to pay an extra $780 to cover the costs, and private insurers are also unhappy because they are stuck with that price and it's up to them to decide how much of the cost they will cover. This puts the patients in a predicament for affordability of the entire treatment. Regardless of what the people say about the price, Gilead is still going to be the only benefiter when it comes to happiness because they are making the profits from it. Everyone else has to suffer the consequences of their decisions. Therefore, a utilitarian would view this case unethical because Gilead is not maximizing happiness for everyone involved.  

KANTIANISM 

In Immanuel Kant's basic principles of Kantianism, Kant focuses on how individuals are treated. Kant believes in treating individuals rationally and respecting them and their choices. According to Kant, The Formula of Humanity describes how an individual should not be treated merely as a means, and instead as an end. Looking at this case from a Kantian perspective, it is hard to determine if Gilead’s pricing of Remdesivir was the right decision by the company. With heavy involvement by the government, many believe that the price of Remdesivir should be significantly lower than what the company said it will be. One could even argue that under Kantianism, Gilead's pricing was an unethical decision. This is because Gilead is not treating its customers rationally by putting the price that high. Instead, Gilead is treating taxpayers as a means rather than as an end because they are not even considering the possibility of lowering the cost of each vial.  

On the other hand, one could argue that Gilead has done nothing wrong in terms of what they put the price at for Remdesivir. Their decision of pricing it at $390 and $520 was a well thought out decision. Also, there was nothing to base their pricing off of because they are one of the first companies to have a working treatment that fights against the virus. With no other price to reference when coming to the decision of what to set the price of one of the only drugs to have an affect on a coronavirus, you can’t say that Gilead was acting irrational when it came to pricing Remdesivir.  

VIRTUE THEORY 

According to the Virtue Theory, one must act so as to embody a variety of virtuous or good character traits and so as to avoid vicious or bad character traits.(Salazar 2020) The Virtue Theory is based on the four cardinal virtues: prudence, courage, temperance, and justice. In this case, Gilead seems to not embody two out of the four virtues. Their decision has caused them to violate many virtues it takes to be a virtuous leader.  

The virtue of prudence means having good judgment, and acting with knowledge. Gilead doesn’t embody the virtue of prudence because many believe that they did not make the right decision to price Remdesivir that high. Having the drug’s price that high shows bad of a judgement they made to think that patients will be able to afford the drug at that high of a price during a pandemic. Courage means taking risks and willingness to take a stand for the right ideas and actions. When it came to pricing Remdesivir, Gilead admitted to not knowing what to price the drug at because there wasn’t a playbook that gave directions on how to price a drug of high importance in the middle of a pandemic.(Gilead 2020) Despite the outrage of the price, Gilead had the courage to come out and tell the world about its process in pricing Remdesivir.  Showing temperance as well, they respectfully explained how they came to their price for Remdesivir and why they felt it was the best possible value. Justice is fair treatment for all and giving people what they want. In this case, Gilead is not treating patients with Covid-19 fairly by setting the price that high. They are not giving the patients a fair chance at being able to afford the 5-day treatment with the price being that high. If one virtue is lacking everything collapses, so since two virtues, almost three, are lacking that means that everything collapses, and this case is deemed unethical.  

JUSTIFIED ETHICS EVALUATION 

Personally, I thought that Gilead was not in the wrong for pricing Remdesivir that high at first. If you take a step back and look at how serious this drug’s price is affecting the world, it really didn’t seem like the pricing was too big of an issue. It was estimated that Remdesivir decreases the amount of time you stay in the four days. Those extra four days in the hospital may cost you more than the price for the 5-day treatment, which costs between 2340-3120 USD. I also thought Gilead could have even priced it at a lower cost of something like $290 instead of $390 per vial and people still would have had an issue with it being too high. Along with that, they have been committed to donating over a million vials of Remdesivir to hospitals all over the U.S. and the rest of the world.  

However, after researching this case for quite some time, I believe that Gilead’s decision in pricing Remdesivir was unethical. In my opinion, Gilead could've been more lenient when it came to pricing Remdesivir. Considering the circumstances we’ve been put in because of this pandemic, being able to afford a treatment that high of a price seems a little unrealistic. With the price set that high, as you can clearly see, it affects many individuals who are dealing with COVID-19. Whether it be not being able to afford it at that price, or not wanting to pay at all, Gilead’s pricing has made many people furious. Also, because Remdesivir is, as of right now, the only working treatment against Covid-19, it is as if Gilead is exploiting the market for antiviral drugs. Having nothing to reference when it comes to pricing a drug that fights against a virus, Gilead is now going to be the company that is referenced for pricing because they are the first ones to have to do this during this pandemic. Overall, I think that the government should have been the ones to decide the price of Remdesivir because they were so heavily involved in its research and development. Also, it was a government sponsored trial that was pivotal for the Gilead and it brought their antiviral drug into the light. But, because Gilead has the rights to Remdesivir prior to any government involvement, the government basically had no say in what the company can price it at. It feels as though Gilead is capitalizing on a drug that the government already paid for.  

COMPANY ACTION PLAN

The current issue in this case is that Gilead has set a high price for Remdesivir, a drug that the government funded most of its research and development. Remdesivir was basically paid for by taxpayer’s money and government funding. The first step to resolve this issue is to reevaluate  the research that went into deciding what the best possible value was for Remdesivir. In order to lower the cost, Gilead has to consider the amount of contributions we made as taxpayers and how much the government funded to make Remdesivir. Also, they must take into account that we are in the middle of a worldwide pandemic, so they have to look at what is a reasonable cost that [people can afford to pay in times like this. The next step would be to simply lower the cost per vial of Remdesivir. This would solve the issue of having to deal with the negative publicity that stemmed from its initial pricing. Also, this would save a lot of people money who are suffering during this pandemic. There is nothing stopping Gilead from making a profit, even if they decided to lower the cost per vial, they would still be making a huge profit. Also, seeing how this virus isn’t going away anytime soon, Gilead has all the time they need to make large sums of profit when the time comes to commercializing Remdesivir. Once they figure out the price situation, Gilead can move on to focusing on how they are going to create an amount of supplies that meet the demand of hospitals around the world. That way everyone has access to Remdesivir.

It seems as though Gilead may need some guidance as to what they need to do to resolve this issue. At the moment Gilead strives to make the medicine affordable for everyone able to purchase it. The company’s current mission statement is “To discover, develop and deliver innovative therapeutics for people with life-threatening diseases.” They need to focus on how to make their medicine available to everyone, and that means even those who can’t afford to pay for it. I recommend that Gilead  If they try to make Remdesivir available for everyone to use, and not worry about overpricing it, they could eventually find a median cost that is affordable for everyone and still brings in profit for the company. Some core values that are specifically relevant to Gilead are integrity, inclusion, teamwork, and accountability.  By doing what’s right, encouraging diversity, working together, and taking personal responsibility for their actions, Gilead can ensure its customers that they are a transparent and trustworthy company.  

Ensuring ethical productivity and monitoring ethics in the future will be very important for Gilead in order to prevent a problem like to ever happen again. Gilead should have a sit-down discussion with their employees on how to be ethical when dealing with decisions like pricing a drug in the middle of a pandemic. Also, Gilead may need to train employees on how to evaluate the cost of a drug, while maintaining an ethical mindset. With the controversy surrounding this issue, firing any employees wouldn’t really help with the situation getting resolved. Instead, Gilead could hire an expert in pricing medicine to help evaluate and determine a new price that the company could use to maintain a healthy profit while still being able to provide the medicine to everyone in need of it. Once the company finds a new balanced price, they could market their new price and begin to commercialize their product for sale. This can bring in good publicity to the company by showing that they are thinking about the citizens who are currently suffering financially and health wise during this difficult time. Again, by lowering the price, Gilead will still remain profitable while being able to provide the medicine to more people now because of its affordability.  

REFERENCES 

O’Day, Daniel. An Open Letter from Daniel O’Day, Chairman & CEO, Gilead Sciences. 29 June 2020, stories.gilead.com/articles/an-open-letter-from-daniel-oday-june-29. (Gilead 2020)

“NIH Clinical Trial Shows Remdesivir Accelerates Recovery from Advanced COVID-19.” National Institutes of Health, U.S. Department of Health and Human Services, 29 Apr. 2020, www.nih.gov/news-events/news-releases/nih-clinical-trial-shows-remdesivir-accelerates-recovery-advanced-covid-19. (NIH 2020)

Commissioner, Office of the. “Coronavirus (COVID-19) Update: FDA Issues Emergency Use Authorization for Potential COVID-19 Treatment.” U.S. Food and Drug Administration, FDA, www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-issues-emergency-use-authorization-potential-covid-19-treatment. (FDA 2020)

“The Real Story of Remdesivir.” Public Citizen, 7 July 2020, www.citizen.org/article/the-real-story-of-remdesivir/?eType=EmailBlastContent. (Public Citizen 2020)

“HHS Announces Shipments of Donated Remdesivir for Hospitalized Patients with COVID-19.” U.S. Department of Health and Human Services, 9 May 2020, www.hhs.gov/about/news/2020/05/09/hhs-ships-first-doses-of-donated-remdesivir-for-hospitalized-patients-with-covid-19.html. (HHS 2020)

Hannah Denham, Yasmeen Abutaleb. “Gilead Sets Price of Coronavirus Drug Remdesivir at $3,120 as Trump Administration Secures Supply for 500,000 Patients.” The Washington Post, WP Company, 29 June 2020, www.washingtonpost.com/business/2020/06/29/gilead-sciences-remdesivir-cost-coronavirus/. (TWP 2020)

“ICER Provides First Update to Pricing Models for Remdesivir as a Treatment for COVID-19.” ICER, 23 July 2020, icer-review.org/announcements/updated_icer-covid_models_june_24/. (ICER 2020)

“Veklury (Remdesivir).” Phe.gov, 2020, www.phe.gov/emergency/events/COVID19/investigation-MCM/Pages/Veklury.aspx. (PHE 2020)

Salazar, Heather. The Business Ethics Case Manual. n.d. (Salazar)

Wells Pharmacy Network: Unapproved COVID19 Treatment (2020)

Wells Pharmacy Network is a compounding pharmacy that specializes in wellness, anti-aging, weight management, urology, sexual health, thyroid and adrenal health, and veterinary compounding solutions. They claim that “patient safety is [their] priority and [their] commitment to the quality of the preparations [they] compound is the most important thing [they] do each and every day” [11]. Looking into the history of the Wells Pharmacy Network, one would see that this a very far-fetched claim. They have had several scandals in the past decade including unsanitary conditions, misbranded drugs, recalled products, and several FTC violations. The most recent wrongdoing of the compounding pharmacy is Quad Immune. Quad Immune is “a combination of 4 products clinically demonstrated effects on the immune system” [6]. Wells Pharmacy Network has advertised Quad Immune as a treatment for COVID19. This sounds all well and good until you find out that their big ticket item, Thymosin alpha 1 “has not been approved by FDA, nor has it been proven safe or effective for treating COVID-19” [5]. 

This case will be looked at through the four different ethical lenses, Individualism, Utilitarianism, Kantianism, and Virtue Theory. According to Individualism, the actions were unethical as they broke the FTC. Then a utilitarian would argue that more harm was done in the case than maximizing happiness. A Kantian will argue that the company’s actions were impermissible because they were not loyal or honest to their patients. And according to Virtue Theory, this case is unethical because Wells Pharmacy Network did not satisfy any of the four characteristics: courage, honesty, temperance, and justice. Based on these ethical theories, I would suggest that the company needs to fix all of the problems they have had over the past several years to repair their image and their relationship with their patients. 

Company Background:

In the summer of 2012, Franck's Compounding Lab of Franck's Pharmacy in Ocala, Florida was closed in the wake of The Centers for Disease Control and Prevention (CDC) warning “urging physicians not to use sterile products made by Franck's Pharmacy. The warning was issued after the CDC traced a rare fungal eye infection back to the pharmacy” [4]. The drug that was giving patients fungal infections in their eyes was called Brilliant Blue G, or BBG, which was never approved by the FDA. “Investigations by numerous state, county and federal health agencies concluded that Franck’s BBG was adulterated and not sterile and that the defendants had violated numerous federal rules and regulations” [7]. “The FDA investigators observed numerous instances of unsanitary and inappropriate practices by compounding technicians who left and re-entered clean rooms without changing lab coats, who were touching non-sterile items while wearing their sterile gloves and then returned to compounding activities” [7]. This was the last of many scandals from Franck’s Pharmacy. 

The connection from Wells Pharmacy Network to Franck’s Pharmacy is that “Franck’s Compounding Lab, which was one of the largest compounding labs in the country, was bought by Wells Pharmacy Network” [4]. Wells Pharmacy Network inherited these problems while knowing about them. Obviously problems would arise from this. For example, from the summer of 2013 to the summer of 2014, the FDA conducted their scheduled inspections of the Wells Pharmacy Network compounding facilities. During these investigations the FDA found many violations like “serious deficiencies in [their] practices for producing sterile drug products, which could lead to contamination of the products, which put patients at risk,” “invalid prescriptions for individually-identified patients for a portion of the drug products you produce,” [9] and many others.

Two years later in 2016, a major recall of 616 recently produced products at the time. The recall was prompted by another concern about sterility from the FDA. The FDA did not force the recall meaning Wells Pharmacy made the call themselves. In the recall announcement The compounding lab claimed that "no vial or portion of any lot of these medications has been found to be nonsterile" [3] and gave the excuse that their facilities were “undergoing an expansion and enhancement and the FDA would have preferred that we stop production during construction” [3]. Some of the dots do not connect because why would a compounding pharmacy still be producing drugs in areas of construction in the first place. In addition, why would the company recall products that they have claimed to not be nonsterile. It seems as though they are trying to cover their tracks by being misleading in their recall. 

COVID19 Scandal:

After all of these scandals and more, Wells Pharmacy Network had their most recent scandal involved with the COVID19 pandemic. Wells is known for wellness, anti-aging, weight management, urology, sexual health, thyroid and adrenal health, and veterinary compounded pharmaceuticals. So it seems like viruses like influenza and SARS are not in their field of research, or expertise. It's odd to see them develop a treatment/cure for COVID19 right in time for the summer of 2020, right when the US was months into a quarantine/lockdown because of the COVID19 pandemic. 

Image from Wells Pharmacy Network website.

This is when Wells Pharmacy came out with their brand new product called Quad Immune. Quad Immune was announced by a doctor that did not even work on developing the product. This doctor is Dr. Gordon Crozier, “a board-certified physician, speaker, lecturer, and best-selling author” [6]. For the online webinar announcement for the product, Dr. Crozier discussed “that there has never been a better time to optimize you and your patient’s immune system.” [6]. No better time to advertise a “treatment” for a virus, than during a worldwide pandemic. Quad Immune consists of  the four drugs, “Thymosin alpha 1, Zinc, Vitamin D, and Vitamin B Complex with Vitamin C. Quad Immune supports the human immune response against viral infections, and Thymosin alpha 1 has been shown in studies to help regulate pro-inflammatory cytokine storms” [6]. Wells Pharmacy Network’s product catalog for 2020 explains the four substances included in the Quad Immune package. 

Image from the official 2020 catelog.

The Thymosin Alpha 1 (TA1) injection is the main drug in Quad Immune. The catalog states “studies have demonstrated improvements in immune system cell subsets and the potential of TA1 for the treatment of a range of diseases. Thus, Thymosin Alpha 1, due to the immune stimulating effects exhibited by TA1, may have utility for the treatment of age or disease related immune suppression” [11]. The biggest problem with these claims about the TA1 injection is that it has never been approved by the FDA to treat any illness, disease, or virus. On the bottom of the Thymosin Alpha 1 injection page to the catalog the fine print says that “This statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease” [11], meaning that everything they have claimed about the injection has not even been proven. So in the official catalog, they are advertising unapproved information that could be very harmful. 

The thymosin alpha-1 injection.

If one were to look into thymosin alpha 1, they would find the several side effects that can happen even if someone uses the injection as instructed. Thymosin alpha 1’s generic brand name is Zadaxin. Zadaxin has been prescribed to patients in order to treat hepatitis B. These same patients have experienced common side effects such as “redness and discomfort at the injection site, muscle atrophy, multiple joint aches and pains, and swelling and rash of the hand” [8]. Along with the studies showing thymosin alpha 1 improving the immune system’s functions, there is also a mechanism of the injection that has done the opposite. In some studies, the drug has shown to have “a feed-back dampening effect on the immune system, leading to increases in regulatory T cells and a decrease in the production of inflammatory cytokines” [10]. From the several studies testing the injection, there is not much certainty in what its true functions are. This is why the drug has yet to be approved by the FDA.

Wells Pharmacy Network was not the only company making these claims about TA1. There were “more than 30 medical practices and compounding pharmacies across more than a dozen states that have made unproven claims about this drug on their websites and on social media” [2] including Wells Pharmacy Network. The majority of these 30 companies promoting thymosin alpha-1 as a treatment for COVID19 “do not specialize in infectious diseases, but rather focus on plastic surgery or promote ‘wellness,’ ‘anti-aging’ and ‘regenerative’ medicine” [5] just like Wells. It seems like these companies are making claims that they are not qualified enough to make. The problems with this widespread advertisement all across the country during a worldwide pandemic is that every one of their patients are worried and anxious about the coronavirus and will most likely try anything to keep themselves safe. They will put their trust into these companies that look like they know what they are talking about and be manipulated to purchase some drug that could possibly harm them. It also“can make it even more difficult for patients to figure out whom or what to believe, especially if the information is coming from doctors” [2]. On top of putting their health at risk, buying thymosin alpha 1 could also put their wallets at risk since ‘the cost of the drug can run up to $400 for a month's supply, all out of pocket” [2]. Social media has made advertising a lot easier as well for these companies. In April 2020, Wells Pharmacy Network “promoted thymosin alpha-1 on Facebook along with the hashtags "#coronavirus" and "#covid" [2] in order to reach a wider audience and make more money off of their misinformation.  

Because thymosin alpha-1 is not approved by the FDA, it's “unavailable through pharmaceutical companies in the U.S. Instead, it's reaching consumers through an alternative source: compounding pharmacies” [2].  A compounding pharmacy creates custom medications from base ingredients for patients. Rather than providing a pre-mixed formula, the compounding pharmacist begins with base drugs, combining and preparing them to fit the individual patient's needs. Compounding comes with its own problems, however. Even though the base ingredients are from the FDA they do “not test or evaluate drugs made in those pharmacies. So even though those drugs may be legally prescribed, they are never considered FDA approved" [2]. “The medications used in compounding formulas, when broken down, are virtually identical from a chemical perspective. The only real difference is that compounding pharmacies combine the ingredients in-house to meet the individual patient’s needs” [1]. According to many experts in the field, compounding pharmacies are “largely unregulated” [7] and frequently run into scandals like these. 

Ethical Theory Analysis: 

Stakeholders:

The main stakeholders in this case are the patients and employees of  Wells Pharmacy Network, the FDA and FTC and Wells Pharmacy Network as a whole. The patients are the ones who are getting put in harm's way so they are the ones who have the most to lose in this terrible situation. Next is the employees and Wells Pharmacy Network itself because if this scandal gets really big, they could lose money, customers, and/or their jobs. And lastly the FDA and FTC need to be worried about this situation and other situations like this because the health and safety of the patients and the responsibility of keeping compounding companies like Wells Pharmacy Network in check is all on their shoulders. If they drop the ball like this more they could lose reliability. 

Individualism:

The theory of individualism states that the only goal a business has is to maximize their profits for themselves and their shareholders, but to do it within the law. The only direct goal of any business is to profit, but there's still an obligation to be lawful in their practices. 

Wells Pharmacy Network was trying to make themselves look better by saying they had the drug that would make one immune to the coronavirus. They were hoping they could make a profit off of this misinformation, and probably did so,  but this was an illegal action. These kinds of actions violate the Federal Trade Commission Act, also known as the FTC Act. Under this Act, the FTC is empowered to prevent unfair methods or practices that affect commerce; seek monetary relief and other relief to consumers that were harmed or injured; enforce rules against acts or practices that are unfair or deceptive, and establish requirements designed to prevent such acts or practices; conduct investigations relating to the organization, business, practices, and management of entities engaged in any type of commerce; and make reports and legislative recommendations to Congress and the public [FTC Act]. Wells Pharmacy Network Violated this act by using misinformation about the TA1 injection to promote its sale. This action is deceitful and unfair to the customers and patients of the compounding pharmacy, so Wells has broken this fundamental law of the FTC. This is an unethical and impermissible action in an individualism sense even if they were trying to maximize their profits from the drug. 

Utilitarianism: 

In utilitarian theory, an action is deemed ethical if it promotes happiness to the maximum number of people. Happiness is the only thing  that has intrinsic value and should be brought out to all stakeholders and doing so impartially for the long run. On the other hand, if an action does not bring the most amount of happiness or even harms any of the stakeholders, it is considered impermissible to a utilitarian. 

Wells pharmacy was probably very happy that they could fool a few customers into buying the immunity from covid, making themselves a little bit of money in the short run, but in the long run the customers are going to be unhappy with them when they find out it was all just a ruse. So in the long run, this scandal could cause Wells Pharmacy Network to lose business or even get shut down for good. The worst part of the compounding pharmacy’s actions is that it put the recipients of the TA1 injection at risk. Several studies have shown no definitive pros to using thymosin alpha-1 but have shown some side effects that could ultimately hurt the person taking the drug. To a utilitarian, if anyone is being harmed from an action, that action is deemed impermissible. 

Kantianism:

Kant’s theory says that it is wrong for one to manipulate and exploit people for their own advantage. The basic principles of Kantianism are to act rationally, to help others make rational decisions, to respect people, to be driven by one’s own goodwill, and to do the right thing because it is right. According to Kant, if an action follows these principles, that action is considered permissible. The test that is used to see if an action is permissible or impermissible is called the Categorical Imperative. The Categorical Imperative is based on the Formula of Humanity which states that it is wrong to use people as a mere means to get what you want out of them because it exploits them. 

. Wells Pharmacy Network’s actions during the COVID19 pandemic would fail the Categorical Imperative test. They manipulated their customers with lies to make them buy a phony coronavirus treatment. They found out a way to “misuse patients' trust to help create a market for drugs that haven't been proven to work” [2]. These deceitful actions from the compounding company use the patients as a mere means to make a little extra cash during a tough time. Overall, Wells used their patients as objects in order to get what they wanted out of them, money. 

Virtue Theory:

Virtue Theory focuses on four main virtues that include courage, honesty, temperance, and justice. Having courage means one will take risks and stand up for what is morally right. Being honest is agreeing to be truthful with everything one does in their life. Temperance is having self-control in any situation where one wants to do something that could be morally wrong. Justice defines what is lawfully right and fair in life. All four of these virtues must be met in order to be a virtuous or ethical person. 

We can apply virtue theory to Wells Pharmacy Network to see if they are ethical in their practices or not. The company was courageous in one way by taking a risk to promote an unapproved drug to the public, but this was a risk taken in the wrong direction. Since they did not stand up for what is morally right in this situation by not acknowledging they had done something morally wrong and also not trying to initiate a plan to undo this wrongdoing, Wells Pharmacy Network cannot be considered courageous. The most obvious problem with the compounding pharmacy is that they were never honest with their patients, the FDA and FTC, nor with themselves. They purposely lied to try to make a profit. The pharmacy had no temperance in this situation since they couldn’t stop themselves from being unethical and manipulative just to make a quick buck. They saw an easy opportunity to take advantage of their patients and they couldn’t stay away. Lastly, they do not demonstrate the characteristic of justice since they were not lawful or fair in their practices during the pandemic. They violated the FTC Act which breaks the law, and they used their customers’ insecurities about the pandemic against them which was unfair. So according to virtue theory, Wells Pharmacy Network has none of the four virtues needed to be ethical, therefore they are not. 

Justified Ethics Evaluation:

        In my opinion, Wells Pharmacy Network should not be in business anymore. They have received too many second chances for some reason after all of the problems they have caused over the past decade. They began prescribing thymosin alpha-1 early on in the pandemic to give people something that they can do so that they felt like they weren't helpless. But in the long run they were potentially putting their own patients at harm. I think promoting thymosin alpha-1 as a coronavirus treatment was unlawful and unethical because those such claims were not supported by reliable scientific evidence. The whole point of putting a drug on the market is that there are several good, reliable, and respected scientific studies proving that the drug really helps to treat or cure some medical condition or illness. Peoples’ health, wellbeing, and safety are on the line, and that should not be put on the back burner just to make more money. That is just not right. 

On top of this, I believe there are several problems with compounding pharmacies, from the non-FDA approved drugs, to the several safety hazards and unsanitary conditions. I think compounding facilities should not be trusted since almost every company of this kind has a history that is very similar to Wells’. Something just doesn’t feel right to me that ingredients get put together by people other than those working for the FDA. I think there needs to be a lot more regulation in this field for the health and safety of everyone. 

Action Plan:

There are many steps Wells Pharmacy Network needs to take if they even want to get close to repairing their image. The pure number of scandals they have alone makes them look bad. I think a good start for Wells could be to follow the law entirely, so no cutting corners or loopholes. That type of behavior from professionals is unexceptable. Another big thing they need to work on is being completely transparent and honest with their patients. They state on their website that patient safety is their number one priority, but that could not be further from the truth. 

A new mission statement for the company should be “We vow to keep our patients safe, happy, and healthy by using the most reliable and trustworthy science around.” This statement is much less vague than the mission statement they have now, which is an improvement in itself. The new statement also ensures that there will be no manipulation or unfairness, and that all of the patients will be in good hands. 

Wells Pharmacy Network could also follow some core values in order to become more ethically efficient in their actions. Their new core values should involve authenticity, patient safety, responsibility, and intelligence. The company really needs to work on being authentic and honest because that has been their biggest struggle during their several scandals. Being honest will be challenging for them because of all of the easy loopholes that come with being a compounding pharmacy. In my opinion focusing on patient safety is the most important thing for them to do. If they keep putting the public in harm's way, they could get shut down for good. If they want to be taken seriously from this point on, they will need to be responsible and act like real professionals. And finally, Wells Pharmacy Network needs to be more intelligent when making decisions. If they do not, the state of the company could be destroyed. Changes in policies, like a new mission statement and four core values need to take place if Wells wants to have any kind of future as a successful company.

A good thing for the company could be finding completely new management and other higher positions like CEO. The new employment should be from the same field but should also be known for being trustworthy to patients. Wells needs to rethink their marketing strategy as well. Using the marketing tools they have now makes them break the laws enforced by the FTC. They have to stop using deceitful and unfair misinformation when marketing their products. If Wells follows a plan similar to this, they could mend up their relationship with their patients and possibly become more successful and make even more of a profit off of doing good instead of doing bad. 

Resources:

[1] Apothecary, Archway. “3 Differences Between Compounding & Retail Pharmacies.” Archway Apothecary, 28 Aug. 2019, archwayapothecary.com/3-differences-between-compounding-retail-pharmacies/.

[2] Dreisbach, Tom. “Web Of 'Wellness' Doctors Promote Injections Of Unproven Coronavirus Treatment.” NPR, NPR, 1 Oct. 2020, www.npr.org/2020/10/01/914433778/web-of-wellness-doctors-promote-injections-of-unproven-coronavirus-treatment.

[3] Goldschmidt, Debra. “Wells Pharmacy Network Recalls Hundreds of Products.” CNN, Cable News Network, 22 Sept. 2016, www.cnn.com/2016/09/22/health/wells-pharmacy-network-recall/index.html.

[4] Indest III, George F. “Are You Facing Allegations Against Your Medical License?” The Health Law Firm, 22 Aug. 2012, www.thehealthlawfirm.com/blog/posts/franck-s-pharmacy-closes-its-doors-compounding-lab-becomes-wells-pharmacy-network.html.

[5] Krishnamoorthi, Raja. “To FDA and FTC Re Thymosin Alpha-1.” Received by The Honorable Dr. Stephen M. Hahn and The Honorable Joseph Simons, Oversight.house, Subcommittee on Economic and Consumer Policy , 28 Oct. 2020, oversight.house.gov/sites/democrats.oversight.house.gov/files/2020-10-28.RK%20to%20FDA%20and%20FTC%20re%20Thymosin%20Alpha-1.pdf.

[6] Pantoja, Eduardo. “Wells Pharmacy Network Is Proud to Host a Webinar with Dr. Crozier on Quad Immune.” Wells Pharmacy Network, 24 July 2020, www.wellsrx.com/webinar-quadimmune/.

[7] Reynolds, Matt. “Compounding Pharmacy's Drug: Accused of Blinding Patients.” CNS, 11 Mar. 2013, www.courthousenews.com/compounding-pharmacys-drug-accused-of-blinding-patients/.

[8] “Side Effects of Zadaxin (Thymalfasin), Warnings, Uses.” RxList, RxList, 3 Mar. 2009, www.rxlist.com/zadaxin-side-effects-drug-center.htm.

[9] Turcovski, Susan M. “Warning Letter FLA-15-07.” Received by Benjamin H. David, President, CEO of Wells Pharmacy Network, Web.archive, 10 Nov. 2014, web.archive.org/web/20170406034011/https://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2014/ucm423242.htm.

[10] Tuthill, Cynthia W, and Robert S King. “Thymosin Alpha 1–A Peptide Immune Modulator with a Broad Range of Clinical Applications.” Journal of Clinical and Experimental Pharmacology, 2013, doi: 10.4172/2161-1459.1000133.

[11] Wells Pharmacy Network. Product Catalog, Wells Pharmacy Network, 2020, irp-cdn.multiscreensite.com/1571d9a1/files/uploaded/Catalog2020-V2.pdf.