Purdue Pharma Pleads Guilty to Federal Criminal Charges Regarding OxyContin (2020)

    For the past few decades, The United States of America has been plagued with an opioid epidemic. Purdue Pharma, the makers of OxyContin, have been known to be greatly contributing to this epidemic, if not causing it entirely. Recently, the company has been charged with several criminal charges, as well as made to pay billions of dollars in fines. As a part of the settlement that was reached, the Sackler family, who has owned the company since the 1950’s, will lose ownership of Purdue Pharma, as it is turned into a public benefit company. 

     All ethical theories would find several issues with the actions of Purdue Pharma. From an individualistic perspective, their actions were those of a typical business trying to maximize profit, however several violations of the law make their actions impermissible.  A utilitarian would also see several issues with this situation, as the biggest concern of utilitarianism is maximizing happiness for all. As will be outlined in this paper, not a single individual in this situation ended up with what one would consider to be happiness. From a Kantian perspective, several actions of Purdue Pharma are considered impermissible, particularly using people as a means to some end goal, as well as practicing manipulation of consumers. Finally, virtue theorist would find concern in the fact that almost all no virtuous traits were carried out by Purdue Pharma, but rather they practiced vices such as greed, dishonestly, and manipulation. 

    Although Purdue Pharma made several unethical mistakes in the marketing and distribution of OxyContin, there are things that can and should be done to fix this problem. By taking responsibility and showing that they have a desire to help those that they harmed, Purdue Pharma has the potential to improve their public image and regain the trust of Americans. 

Ethics Case Controversy 

 

Purdue Pharma's OxyContin, the meditation that has 
caused millions of deaths and led to the downfall
of the company. 

    Throughout the past couple of decades, the opioid crisis has become characteristic of the United States of America, and Purdue Pharma is being held responsible for creating it. The company has had to admit to “enabling the supply of drugs without legitimate medical purpose” (BBC), meaning that their only concern was selling their medication with no regard to whether it was done properly and safely or not. Recently, Purdue Pharma has been undergoing a federal investigation on the basis of lack of care involved in distributing OxyContin.  This has led to an $8.3 billion settlement to be reached. The settlement emphasizes that “for more than two decades, there has been a widespread problem of overprescribing, diverting, and abusing pain medication in America, while drug manufactures such as Purdue profited from this issue and failed to take responsibility or action” (Rowland). As part of this settlement, the Sackler Family, which has owned Purdue Pharma since the 1950’s, will not only lose ownership of their company, but will admit to “three felony counts for defrauding the federal government by misleading regulators about its efforts to restrict overprescribing of the drug and to violating anti-kickback laws by paying doctors to write more OxyContin prescriptions” (Williams).  A prime example of their wrongdoing was in 2012, when “members of the Sackler family demanded that company executives come up with a plan to generate greater revenue in response to slumping sales. A new marketing plan, called ‘Evolve to Excellence’ was created. This plan involved more intensified marketing of OxyContin to extreme, high-volume prescribers who were already writing ‘25 times as many OxyContin scripts’ as their peers.” (Rowland). While the company agreed to pay huge fines because of this as well as admit criminal liability, the family that owns the company, as well as executives within the company, claim that they "acted ethically and lawfully, and the upcoming release of company documents will prove that fact in detail” (Rowland). 

    This investigation has been ongoing for a substantial amount of time, however a settlement was just now reached due to the presidential election, but some are saying that it was far too rushed, and feel as if Purdue Pharma should have suffered more consequences for their actions. The Justice Department was pushed to settle a large number of outstanding cases involving major corporations, as “Administrations often seek to resolve significant cases as they near the possible end of their time in office, and with Election Day drawing near, the Trump administration has pushed to finalize a number of such matters this month” (Rowland). Massachusetts attorney Maura Healy stated that she believes that the Justice Department has failed, because “justice, in this case, requires exposing the truth and holding the perpetrators accountable, not rushing a settlement to beat an election” (Rowland). 

 

    The substantial amount of money that will be paid in this settlement will be used to redress past wrongdoings, as well as provide new resources for treatment and care of those impacted by OxyContin. Furthermore, Purdue Pharma will be turned into a Public Benefit Company, “meaning it will be governed by a trust that has to balance the trust’s interests against those of the American public and public health” (Balsamo). This comes as a relief to many, as the Sackler family has evidently caused an abundance of problems for the American public, and thus, they will no longer have control of their company. 

Timeline of Events 

 

Stakeholders

    There are countless stakeholders in this situation, including people who currently suffer or have previously suffered from addiction to OxyContin, the family and friends of people facing this addiction, the Sackler family, and the American population in general. People who have faced addiction to OxyContin largely have Purdue Pharma to blame, because if the medication was marketed and distributed properly, it’s likely that they would not have had a problem with it at all. Brooke Feldman, who is in recovery from opioid use disorder, stated that she “is glad to see Purdue admit wrongdoing. She said the company has acted for years as a ‘drug cartel’” (Balsamo). Many people who have faced addiction have lost a lot from this situation, including their jobs, relationships with family and friends, and some even losing their lives, which makes them one of the primary stakeholders in this situation. 

Protesters stage a "die-in" inside Harvard's
Arthur M. Sackler Museum to protest the Sackler's
involvement in the opioid crisis.

    Furthermore, families who are impacted by a member suffering abuse of the drug are also stakeholders, as many have lost someone they love due to the company’s wrongdoings. Ed Bisch, “who lost his 18-year-old son to an overdose nearly 20 years ago, said he wants to see people associated from Purdue prosecuted and was glad that the Sackler family wasn’t granted immunity” (Balsamo). Along with millions of others, Bisch blames the company and the family for the millions of deaths that have occurred, and has noted that “If it was sold for severe pain only from the beginning, none of this would have happened…but they got greedy” (Balsamo). 

    The Sackler family and other top executives are stakeholders because not only were they the decision makers in this case, but they also lost billions of dollars, as well as their company. Since they were the ones who chose to market their product aggressively, bribe medical professionals, and not take precautions to ensure the use of their product was safe and controlled, they ultimately made the decisions that made their company suffer. Because of that, and because they are also at a loss, they are considered stakeholders in this situation as well.

    Lastly, the American public are stakeholders in this situation as well. On top of having to be careful not to abuse OxyContin if they get prescribed it, Americans also have to watch people that they know and care about suffer from addiction. Many people, even if they are in severe pain, do not even want to get OxyContin prescribed to them because of how addictive it is. Since many have to live in fear, as well as watch many Americans suffer from OxyContin addiction, the general American public can be considered stakeholders in this situation as well. 

 

Individualism

    From an Individualistic perspective, there is wrongdoing involved with Purdue Pharma’s actions in the marketing and lack of responsibility in distributing OxyContin. Individualism, the theory created by Milton Friedman, emphasizes that “business actions should maximize profits for the owners of a business, but do so within the law” (Salazar 17). The aggressive marketing of OxyContin would not be seen as unethical from an Individualistic point of view, but rather beneficial to the company. The problem, however, is that Purdue Pharma used unlawful tactics in order to market their product. Purdue admitted to not only “violating federal anti-kickback laws by paying doctors to induce them to write more prescriptions, but also that it “impeded the Drug Enforcement Administration by falsely representing that it had maintained an effective program to avoid drug diversion and by reporting misleading information to the agency to boost the company’s manufacturing quotas” (Balsamo). Because they have violated several laws in order to make profit, this is not permissible under individualism. 

 

    Aside from the illegal aspect, the goal of their marketing was simply to maximize profit, which is the overall goal of Individualism. Since this theory is more so about the business and business owners rather than the consumers, there is nothing wrong with causing millions of addictions and deaths, according to Individualism. As long as the business is actively trying to maximize their profit, and doing so within the law, it is seen as permissible. 

 

    Although “Friedman held that it is the aim and the responsibility of businesses to maximize their

profits” (Salazar 18), Purdue Pharma was still in the wrong from an Individualistic point of view. Although consumers were undoubtedly harmed, that does not matter in and Individualistic sense, unless the law is broken. Since the marketing was not done within the law, however, this is not permissible under Individualism. 

Utilitarianism

    

    Utilitarianism emphasizes ‘maximizing the overall good’ or, in a slightly different version, of producing ‘the greatest good for the greatest number’. Acts that accomplish this aim are good; those that do not are bad” (Desjardins 29). This essentially means that the main goal is to maximize the happiness of everybody involved. 

    When Purdue Pharma was first beginning to sell OxyContin, their actions may have been seen as permissible under Utilitarianism. The Sackler family, as well as top executives in the company, were profiting off of selling this drug, which evidently causes happiness for them. Doctors were under the impression that the timed-release formula was meant to decrease the likelihood of addiction, so having a drug that reduced pain, while also having non-addictive properties, was seen as a great thing in the medical industry. Consumers, who had been dealing with severe pain before, were given a medication that worked well for reducing pain, which in turn made them happy. 

 

    Later on, however, almost everyone was hurt by this situation, meaning that it was shown to be unethical by Utilitarians. Consumers began facing addiction or even death due to OxyContin, meaning that family members were losing loved ones because of this drug. People who suffered from addiction were clearly not happy, and the risk of losing one’s life did not cause happiness either. Purdue Pharma was faced with incredibly large fines, as well as having to give up their business, meaning that he happiness from making profit did not last, and they ended up becoming unhappy as well. Since “business actions should aim to maximize the happiness in the long run for all conscious beings that are affected by the business action” (Salazar 17), and nobody remained happy in the long run, it becomes evident that the actions of Purdue Pharma were not permissible under Utilitarianism. Since almost everyone suffered in the long run and nobody came out of this situation with happiness, it can be seen that these actions are not beneficial to any of the stakeholders. This emphasizes that ultimately, the actions of Purdue Pharma were unethical by a Utilitarian point of view. 

 

Kantianism

    According the The Case Manual, the ethical rule of Kantianism is to “always act in ways that respect and honor individuals and their choices. Don’t lie, cheat, manipulate or harm others to get your way. Rather, use informed and rational consent from all parties” (Salazar 17). Furthermore, according to Kant, “…ethics requires us to treat all people as ends and never only as means.” (Desjardins 38).  Purdue Pharma undoubtedly violated this, as they were using consumers as a means to the end goal of profit. The company did not care that people were becoming addicted to this medication at astounding rates, leading to millions of deaths across America, but rather they used this to their advantage, enabling them to sell more drugs and in turn, make more profit. 

    Although this situation is seen as ethically wrong in both Utilitarianism and Kantianism, it is wrong for different reasons. One of the key differences in the ethical theories is that “Utilitarianism is concerned only with consequences of an action and Kantianism does not make decisions based on consequences, but rather on what Kant calls the ‘Good Will.’” (Salazar 21). This essentially means that just because an action can produce good results, the action cannot be done based on only the outcome. Having Good Will, in this case, means that “…people

have good intentions and use good reasoning to come to conclusions that will 

make their good intentions effective” (Salazar 21). In the case of Purdue Pharma, it becomes clear that their intentions were only good for themselves, and not the consumers. They knowingly harmed millions of people in order to increase revenue, which ultimately benefitted only the Sackler family and top executives at the company. 

 

    One of the most concerning violations of Kantianism is one of the most important aspects of the theory, which emphasizes that the “fundamental ethical duty is to treat people with respect, to treat them as equally capable of living an autonomous life” (Desjardins 38). By continuing to aggressively market a drug that was known to be extremely addictive, Purdue Pharma was taking away people’s autonomy. Causing people to become dependent on a drug is one of the most clear-cut ways to manipulate people, as well as take away their autonomy. Once consumers become addicted, they keep needing more, which means that Purdue Pharma was making more and more profit off of people’s suffering. Because of this, it is evident that this case is extremely impermissible under Kantianism. 

 

Virtue Theory

    Similarly to Individualism, Utilitarianism, and Kantianism, the actions of Purdue Pharma would be seen as unethical by a virtue theorist. Virtue Theory, rather than focusing on individual actions, focuses on the character of individuals. The main objective of this theory is to “act so as to embody a variety of virtuous or good character traits and so as to avoid vicious or bad character traits” (Salazar 17), and it is evident that Purdue Pharma did not do that. 

 

    According to The Case Manual, “A few vices that have been severely detrimental to otherwise savvy and innovative business people are greed, dishonesty, and selfishness” (Salazar 23), and Purdue Pharma has demonstrated all of these. The company showed greed when they went to extreme measures to have their product become more popular. By convincing doctors to prescribe OxyContin more frequently, as well as going so far as to violate the law in order to make more profit, they have shown that they care more about profit than the health and wellbeing of consumers. Furthermore, dishonestly in this situation is rampant. On top of “defrauding the federal government by misleading regulators about its efforts to restrict overprescribing of the drug” (Williams), they have also lied about the dangers of the drug and its addictive properties, putting millions of people at risk. In terms of selfishness, Purdue has put gaining profit above the health of their consumers. They have expressed a selfish need for even more revenue than they already have, and rather than attempting to resolve the problem that they caused, they contributed to it even more. 

 

    Virtue theory values “Character Traits that Promote Wellness or Flourishing of Individuals within a Society.” (Salazar 22), and it is clear that Purdue Pharma does not promote wellness, but rather neglects it in an attempt to maximize profit. Because they marketed their product so aggressively and promoted the over-prescription of the drug, they were not promoting the flourishing of individuals within society, but rather the downfall. Because of all of the vices they have shown, as well as lack of virtuous characteristics, it is evident that a virtue theorist would view the actions committed by Purdue Pharma to be completely unethical. 

Justified Ethics Evaluation 

            In my opinion, Purdue Pharma’s actions were completely unethical. Not only did they harm millions and millions of people for the sole purpose of making profit, but they also did nothing to stop the epidemic that they created, but rather contributed to it even more. They were well aware that people had become extremely addicted to OxyContin, however, they continued to aggressively market the product, as well as bribe doctors to prescribe it abundantly. By implementing things such as “intensified marketing of OxyContin to extreme, high-volume prescribers who were already writing ’25 times as many OxyContin scripts’ as their peers.” (Rowland), Purdue Pharma put the health and safety of consumers at risk for the sole purpose of increased profit. Furthermore, they broke the law to do these things, by “defrauding the federal government by misleading regulators about its efforts to restrict overprescribing of the drug and to violating anti-kickback laws by paying doctors to write more OxyContin prescriptions” (Williams). Because of this, it is clear that Purdue Pharma made several ethical mistakes, which shows an abundance of negligence within the company. Not putting consumers first, but rather putting their lives at risk, is not ethical, and therefore Purdue Pharma acted completely unethical in this situation. 

 

Company Action Plan 

    It is evident that Purdue Pharma’s actions harmed millions of Americans. Because of this, there are several steps that must be involved in order to correct their wrongdoing. 

    First and foremost, the family and executives within the company need to accept their wrongdoing and admit to creating and contributing to the opioid epidemic. The family claims that they “acted ethically and lawfully, and the upcoming release of company documents will prove that fact in detail” (Rowland). This is evidently not true, and one of the first priorities when it comes to getting forgiveness from the general public is to admit that they did something wrong. Acknowledging their mistakes is the least that they can begin with doing. By doing this, they will show the American public, as well as those who have faced consequences from OxyContin, that they acknowledge their mistake and know that it was wrong of them.  

     As of now, Purdue is set to transform into a Public Benefit Company. One of the main purposes of this is “to ensure funding is devoted to advanced treatment programs” (Rowland), but also to ensure that the Sackler family will lose control of their company. Because of this, it will be impossible for the Sackler family to change the way they market and distribute OxyContin, since they will no longer have any part in it.

    One of the most important and potentially helpful things that the Sackler family can do to is donate money to families and communities that have been heavily impacted by the opioid crisis.  This is already a part of the settlement, since members of the Sackler family have already expressed a desire to “direct substantial funding to communities in need, rather than to years of legal proceedings…members of the Sackler family have expressed ‘deep compassion for people who suffer from opioid addiction and abuse and hope the proposal will be implemented as swiftly as possible to help address their critical needs’”(Williams). Despite the fact that this is already outlined in the settlement, it could be very beneficial for the Sackler family to donate some of their own personal money. This would not only improve the company’s public image, but it would show Americans that the family truly does care about how many people they have harmed, and are willing to give up part of the profit that they fought so hard for in order to help. 

    If the company wants to be able to remain profitable or be able to increase their profits, they would need to improve their public image and make sure that they are staying within the law. The Sackler family, however, will no longer have the ability to profit from the sale of OxyContin, since they no longer own the company. The Public Benefit company, however, must ensure that they are doing better than the Sackler’s in terms of marketing, distribution, and not violating the trust of the federal government and the American people. 

     Some of the values that need to be prioritized are trust, compassion, customer well-being, and honesty. Trust needs to be prioritized because it is one of the most important aspects of running a business. After the controversy, many Americans do not trust Purdue Pharma, and therefore the new company that will remain manufacturing OxyContin will need to regain this trust. The new company, as well as the Sackler family, needs to show compassion.  It was one of the main things that has been lacking for decades, and ensuring that businesses care about the people that they are supplying to is important, and it helps build trust. After all of the company has done, they need to show compassion and prove to Americans that they have learned from their mistakes. Customer well-being is the most important of all of these values. Because they are pharmaceutical company, that should be their first priority, however it wasn’t while the Sackler family owned it. The new Public Benefit Company, as well as the Sackler family, even after losing their company, need to show that they do care about the well-being of their customers. If that does not happen, then the company will not be able to flourish, and the Sackler family will remain in bad view from the public. Lastly, honesty is important in any business, but pharmaceutical companies especially. Pharmaceuticals have the power to kill people, create addictions, and cause many adverse effects. Companies need to be honest with not only their customers, but the government as well. It needs to be apparent to customers that the company has the well-being of customers as the first priority, and will not practice dishonesty to deceive customers for the purpose of profit. 

 

     If the Sackler family follows these steps of publicly apologizing, donating money to families and communities that were impacted from OxyContin, and keeping their values aligned, the company has a chance of greatly improving their public image, and potentially gaining the trust of Americans back again. Although it will be hard for them to be completely forgiven, taking steps towards this goal is important. If the family and the company do nothing, then they will be seen as even worse than they already are. 

     It is apparent that Purdue Pharma has made mistakes in the marketing and distribution of their product, OxyContin, that are considered to be extremely unethical. Not only did the company break several laws and lie to the federal government, but they also knowingly contributed to the opioid epidemic that has been controlling America for decades. Many, if not all, of Purdue Pharma’s actions were done for the sole purpose of increasing profits to extremely high amounts, however, they prioritized this over the lives of consumers. When looking at the situation from an Individualistic approach, almost everything is permissible, except for the fact that they broke the law. The ethical theory essentially states that businesses can do whatever needs to be done in order to maximize profit, as long as it is within the law. Because of that, it is obvious that this is impermissible under Individualism. In the sense of Utilitarianism, it is obvious that not everybody is happy in this situation. Not only are there millions of Americans suffering from addiction to OxyContin, but also family members and members of the community are drastically affected from that as well. Furthermore, the Sackler family ended up losing their company and having to pay billions of fines, so they are evidently not happy either. When preparing an analysis from a Kantian perspective, it becomes apparent that this is also impermissible, Purdue Pharma used customers as a means for increasing profits, and harmed them in the process. Lastly, a virtue theorist would also disagree with these actions. They are not practicing virtues that make businesses and people flourish, but they are instead practicing vices such as greed and dishonestly that harm people. Despite the fact that Purdue Pharma made a huge mistake and harmed the American people, there are steps that they can take to make things right. By taking full responsibility for their actions, as well as showing that they regret what they did by making monetary donations to those who have been affected, Purdue Pharma and the Sackler family has the ability to repair their public image, as well as potentially gain the forgiveness and trust of the American people. 

 

                                                                                                           Julianne Hess

 

 

 

 

 

References

 

Balsamo, Michael, and Geoff Mulvihill. “OxyContin Maker Purdue Pharma to Plead to 3 Criminal Charges.” AP NEWS, Associated Press, 21 Oct. 2020, apnews.com/article/virus-outbreak-business-criminal-investigations-opioids-epidemics-5f0679ffee14577b1696a94b64abc9c2.

DesJardins, Joseph R. An Introduction to Business Ethics. McGraw-Hill/Irwin, 2014. 

Ofgang, Erik. “Purdue Pharma and OxyContin: A Timeline.” Connecticut Magazine, 24 Oct. 2019, www.connecticutmag.com/health-and-science/purdue-pharma-and-oxycontin-a-timeline/article_e140534a-f50f-11e9-96ab-8bb2725250e0.html.

“OxyContin Maker Purdue Pharma to Plead Guilty to 3 Criminal Charges.” CBS News, CBS Interactive, 21 Oct. 2020, www.cbsnews.com/news/oxycontin-maker-purdue-pharma-to-plead-guilty-3-criminal-charges-ap/.

Rowland, Christopher, and Meryl Kornfield. “Purdue Pharma Agrees to Plead Guilty to Federal Criminal Charges in Settlement over Opioid Crisis.” The Washington Post, WP Company, 22 Oct. 2020, www.washingtonpost.com/national-security/2020/10/21/purdue-pharma-charges/.

Salazar, Heather. The Case Manual . 

Sherman, Natalie. “Purdue Pharma to Plead Guilty in $8bn Opioid Settlement.” BBC News, BBC, 21 Oct. 2020, www.bbc.com/news/business-54636002. 

Williams, Pete. “OxyContin Maker Purdue Pharma Pleads Guilty to Federal Criminal Charges.” NBCNews.com, NBCUniversal News Group, 22 Oct. 2020, www.nbcnews.com/news/us-news/oxycontin-drugmaker-purdue-pharma-pleads-guilty-federal-criminal-charges-n1244155.

 

Climate Change in the Oil Industry

 

Emily Levesque

Climate Change In the Oil Industry

ExxonMobil

  

Oil is one of the United States’ largest energy sources. It’s used for many things in our day to day life, such as to run cars, generators, airplanes, and even our homes. By the end of 2019, the United States had used roughly 68% of petroleum oil on transportation, as gasoline is the most consumed oil product. Distillate fuel, also known as diesel, is the second most used petroleum product, as this is used in many pieces of equipment, heating, and electricity. Gasoline averaged around 391 million gallons per day, whereas distillate fuel averaged around 172 million gallons per day. Compared to the rest of the world, the United States is the biggest consumer, consuming 20.2% of the world’s petroleum. In comparison, the second largest consumer is China, with a much smaller 13.7%. The U.S. Energy Information Administration predicts that liquid oil, such as gasoline or petroleum, will account for about 35% of total United States energy consumption by 2050, especially since liquid oil is used by the majority of the transportation industry (Energy Information Administration).

         According to National Geographic, “Natural gas is a fossil fuel formed from the remains of plants and animals. Other fossil fuels include oil and coal.” Fossil fuels are formed underground, covered in layers of layers of decomposed organisms, soil, and sediment. As these layers continue to grow, the soil becomes extremely tight and compressed, becoming hotter and deeper as it collects. This compression and temperature difference make carbon bonds break down, producing methane, or natural gas. This is collected by drilling straight down from the surface of the Earth. Practices such as hydraulic fracturing – also known as fracking -  splits open rock formations high pressure water, chemical, or sand streams. This is extremely harmful to the environment, as it requires an enormous amount of materials. Water gets pulled not only from habitats, but also from an area’s water table, which is also known as the water level. When water level decreases, wells streams and lakes can dry or reduce, and water quality can be diminished (USGS). This process can also produce very toxic water that can leak into water sources used by society. Fracking also causes micro-earthquakes, and although they are very tiny, they can cause damage to buildings and pipelines (National Geographic). Oil spills are also a massive threat, as it’s almost impossible to fully clean. When spilled into aquatic areas, it’s difficult to retrieve over 20% of the oil spilled. Oil companies are quick to drill in places such as the Arctic, and the harsh environment makes it more difficult to clean up any mistakes (Greenpeace USA). 

 

 

         The oil and gas industry had brought a lot of good things to American economy and life, but one overwhelming threat of their practices is climate change. “On public lands along, oil and gas development are set to generate a massive amount of climate emissions. Federal lands leased to the industry in the last three years could produce as much as 5.9 billion metric tonnes of greenhouse gasses. That’s more than half the emissions that China – the world’s largest emitter – releases per year (The Wilderness Society).” Burning oil releases carbon dioxide, essentially causing the greenhouse effect. The greenhouse effect is when thermal energy is released into the atmosphere, which warms the planet in turn – refer to figure below.  When the planet warms, ice melts faster in the Artic, sea levels rise, and animals migrate to different environments (BBC News). As of 2013, petroleum oil made up 41% of the United States’ carbon dioxide emissions. Yet, despite the clean resources we have available to us, companies try harder and harder to keep oil in such high demand. “Oil companies pour millions of dollars into political campaigns, propaganda, and lobbying so that they can delay the process on renewable energy and ensure their own profits. In 2014, the oil and gas industry spent a total of $142 million lobbying the U.S. government.” It is also to note that former CEO of ExxonMobil, Rex Tillerson, was selected as former Secretary of State (Greenpeace).

 

         ExxonMobil is known as the world’s largest public oil company, as well as the third largest company in the world. The company has been in business since 1892, following the Standard Oil trust. The Standard Oil Company and Trust was founded under John Rockefeller between the years 1870 and 1911 and had controlled the majority of all oil excursions – this could also be called a monopoly. Under the Standard Oil trust, companies in the oil industry could essentially be controlled. This trust was soon diminished in a few years but became known as a holding company (Britannica 2). In short, a holding company is “a corporation that owns enough voting stock in one or more other companies to exercise control over them (Britannica 1).” In 1911 the Supreme Court ordered the trust to split into thirty-three branches. The New Jersey branch of Standard Oil was renamed to Exxon Corporation in the year 1972, becoming one of the only branches to become a multinational company. They began to work in “natural gas, coal, nuclear fuels, chemicals, and mineral ores such as copper, lead, and zinc (Britannica 3).” The company has worked in climate research for almost four decades since then, resulting in almost 150 public papers, 50 peer-reviewed papers, and 300 patents for technological advances in emissions reductions. They’ve invested $10 billion to developing lower-emission energy solutions in the past twenty years, going to enabling research and reducing emissions. Vice President of Public and Government Affairs, Suzanne McCarron, said, “ExxonMobil will continue to focus our efforts on providing the energy the world needs, while simultaneously addressing the risk of climate change by reducing our emissions, helping consumers reduce theirs, and advancing research to find new low-emissions technologies for the future.” Their climate change risk management strategy is developing innovative products and technology, managing climate change risks, engaging on climate change policy, and managing impacts on air and water (McCarron).

         ExxonMobil supported the growth of climate change research through the 1980s, but suddenly stopped their activism come 1990. The company’s manager of science and strategy and development in 1989 acknowledged that gases released by burning fossil fuels raise global temperatures significantly. “Lawmakers at home and abroad began calling for reductions in carbon dioxide emissions from fossil fuels — the lifeblood of Exxon’s business. And, in 1988, the United Nations established a panel of scientists to study the issue and make policy recommendations.” The company grew concerned about government policy, and soon companies began to develop alternatives to CFCs, or chlorofluorocarbons, which erode the ozone layer. In order to try to prevent these forming regulations, Exxon began to try to bring doubt to the public, claiming that more research was needed and that the cost of reducing these emissions were great. In 1992, they joined the Global Climate Coalition, an association of fossil fuel companies who fought these climate change regulations. They contributed almost $16 million to raise questions about climate change between 1998 and 2005, yet other sources say they spent $30 million. In 1997, the United States refused to ratify a United Nations treaty that would reduce greenhouse gasses because it would be harmful to the economy. In 2007, ExxonMobil publicly said that climate change was real and that burning fossil fuels was a huge contributor (Los Angeles Times). Many states from all over the country are suing oil companies they find responsible for damage caused by climate change, mainly for increasing air temperatures and rising sea levels. These not only cause flooding, but also forest fires that we’ve seen for the past few years in California. Connecticut has sued ExxonMobil, who is the nation’s largest oil and gas company. According to the attorney general, William Tong, this caused Connecticut to be unprepared for rising sea-level and storms. The oil industry says that it’s unrealistic to blame one industry for a worldwide problem such as global warming. Delaware claimed that 31 fossil fuel firms failed to warn the state of the hazards of their products. The city of Charleston in South Carolina has filed a climate lawsuit against big oil companies, saying that they should help with repairing flood damage. “I handled their products, and I can tell you from firsthand experience that these companies were not in any way, shape or form sharing information with us about the dangerous flooding and extreme weather their products would cause,” said Mayor John Tecklenburg. Spokesman Casey Norton of ExxonMobil said, “The claims are baseless and without merit. We look forward to defending the company in court.” A 2015 lawsuit was dismissed from two dozen younger people looking for the US to take more action to stop emissions (Grandoni).

The State of New York tried to show that ExxonMobil lied to investors by keeping two separate books for estimating the cost of complying with climate regulations. “ExxonMobil does not dispute either that its operations produce greenhouse gases or that greenhouse gases contribute to climate change. But ExxonMobil is in the business of producing energy, and this is a securities fraud case, not a climate change case,” said Ostrager, a New York Supreme Court judge. It was said that the NY attorney general didn’t produce any investor who was harmed and failed to show that any were misled. Massachusetts has also sued Exxon for “deceptive advertising to Massachusetts consumers and for misleading Massachusetts investors about the risks to Exxon’s business posed by fossil fuel-driven climate change – including systemic financial risk.” Other governments such as Rhode Island, San Francisco, and California are looking for compensation from oil companies for the damage rising temperatures brought to farmers and beachfront businesses, saying that they’ve created a public nuisance. Occurred in October 2018, settled in December 2019 (Grandoni and Mufson). Two states over the last few years have also begun fraud investigations into Exxon due to climate change. In addition, nine cities and counties have also sued major oil companies for climate change compensation. “The industry has profited from the manufacture of fossil fuels but has not had to absorb the economic costs of the consequences,” said Harold Koh, professor of law at Yale who served as legal advisor to former Secretary of State Hillary Clinton (Hasemver). Below is a timeline documenting these events.

 

         The stakeholders involved in this case include ExxonMobil executives such as CEO Darren Woods, Vice President Neil Chapman, and PFO Andrew Swiger (ExxonMobil). Investors are involved as well, as they are the center of the New York lawsuit, having been told incorrect information about how the company dealt with climate regulations. Most importantly, stakeholders also include not only Americans, but also the entire world as this is a climate change matter. In terms of collecting oil, those most affected would be people living in coastal areas as well as those affected by flooding and major storms. These people are all important as they were either directly or indirectly affected by the decisions of ExxonMobil, and they should therefore be considered in all court proceedings.

                Individualists look for the best possible option for long-term, self-interest. An individualist will agree with ExxonMobil, as they are working for a profit – whether or not the public agrees with their methods or not. What they had done was legal (as decided as of the most recent New York Supreme Court decision at the end of 2019), although heavily frowned upon as they were deemed “deceptive” by many state and city governments in the United States. Therefore, an individualist would argue that ExxonMobil was ethical.

         Utilitarianism is the idea that happiness should be maximized from every party involved. I think a Utilitarian would disagree with ExxonMobil in this case, as they didn’t consider investors or the general public. By the company withholding information regarding climate regulations, they are threatening not only the environment, but also the people they are supposed to provide for. Unfortunately, they are not looking for the best of all in this scenario. A utilitarian would consider ExxonMobil to be unethical.

         Kantianism asks that the company not only considers themselves, but also others. They expect companies to not consider themselves exempt from the rules, and that all people should be respected. A Kantian would consider ExxonMobil to be unethical as they are not respecting the environment or those affected. When they had publicly acknowledged climate change, it was due to public outcry and concern rather than their own morals. This is against the Formula of Humanity, which states that humanity should not be treated as a means and always should be treated as an end.

         The virtue theory looks for the proper morals of a decision. It calls you to be honest and generous as well as foster virtuous practices. It calls for self-growth and justice, and that all should be cared for and nurtured. I think someone who followed the virtue theory would see ExxonMobil’s case as unethical, as they weren’t looking for justice for communities affected by their own doing (IEP).

         In my own justified opinion, I believe ExxonMobil understands what they’re doing but refuse to properly acknowledge it, as oil is an enormous industry in the United States. Obviously, many states and major cities agree with this sentiment, and are looking for changes in the industry as a whole. In the 1980s they were supporters of climate change, and avidly agreed that oil was a large contributor to the overall problem. Soon after they changed their stance completely, which was seen by them actively trying to dismiss claims and discredit information. Their effort to discredit scientists grew so evident, that they spent around $16 million, which isn’t a small feat. I understand that oil is a very large industry and will take a very long time to dismantle or fully understand, but I agree with the states’ and their efforts to decrease the damages done. As there is so much money in oil and these companies in general, I do think it’s possible to shift their focus from things life fracking to cleaner energy sources, such as solar, wind, or water. These options are not only more sustainable than fossil fuels, but the cost of clean energy is also significantly lower. The wind energy market is also growing in the United States, which will help to “cut carbon pollution, diversify our energy economy and bring the next generation of American-made clean energy technologies to market.” Water is also a new market that has been vaguely explored, but energy would be created from waves, currents, and tides (Energy). Not only would the oil industry begin to shift to cleaner, less destructive kinds of energy, but they would also most likely earn a profit on these untapped sources.

         The company, ExxonMobil, should properly address these nationwide lawsuits and show their grievances. The people are disappointed in not only the company, but also the industry as a whole, and it’ll be a long and hard journey to redemption. First, they need to properly acknowledge climate change and how they’ve contributed to the growing issue. I also think government officials should remain neutral to their own personal ties to these companies, as that’s why the United States refused to ratify a United Nations treaty that would in turn reduce greenhouse gasses – it would’ve been harmful to the economy. Once this has happened, ExxonMobil could shift their focus to other kinds of energy. That way, they won’t have to use harmful methods to acquire these fossil fuels and can take part in a growing industry. It may take a large amount of money to start this process, but clean energy would take a lot less money to maintain than would be needed for digging for oil deep underground. This change can result in profits, as more and more car dealers are making and selling electric cars. It’s predicted that by 2040, half of vehicles on the road will be electric, and the other half will be run by fossil fuels (Reuters). That takes fossil fuels out of the transportation industry by almost half, which would already cut their future profits by a significant amount. By creating a plan to make these adjustments, I think ExxonMobil can successfully replenish their reputation while making a profit.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bibliography :

 

“U.S. Energy Information Administration - EIA - Independent Statistics and Analysis.” Use of Oil - U.S. Energy Information Administration (EIA), www.eia.gov/energyexplained/oil-and-petroleum-products/use-of-oil.php.

“Holding Company.” Encyclopædia Britannica, Encyclopædia Britannica, Inc., www.britannica.com/topic/holding-company. 1

“Standard Oil.” Encyclopædia Britannica, Encyclopædia Britannica, Inc., www.britannica.com/topic/Standard-Oil. 2

“Exxon Corporation.” Encyclopædia Britannica, Encyclopædia Britannica, Inc., www.britannica.com/topic/Exxon-Corporation. 3

Groundwater Decline and Depletion, www.usgs.gov/special-topic/water-science-school/science/groundwater-decline-and-depletion?qt-science_center_objects=0.

National Geographic Society. “Natural Gas.” National Geographic Society, 9 Oct. 2012, www.nationalgeographic.org/encyclopedia/natural-gas/.

“Report: Oil and Gas Drilling on Public Lands Is Fueling Climate Change.” The Wilderness Society, www.wilderness.org/articles/blog/report-oil-and-gas-drilling-public-lands-fueling-climate-change.

“Resources and Recycling - Impact of Human Activity - KS3 Chemistry Revision - BBC Bitesize.” BBC News, BBC, www.bbc.co.uk/bitesize/gui “Oil.”

“Oil.” Greenpeace USA, www.greenpeace.org/usa/global-warming/issues/oil/.

Suzanne M. McCarron Vice President of Public and Government Affairs at ExxonMobil, et al. “Climate Change.” ExxonMobil, 9 Jan. 2020, corporate.exxonmobil.com/Energy-and-environment/Environmental-protection/Climate-change.

Dino Grandoni, Steven Mufson. “ExxonMobil Prevails over New York in High-Profile Climate Fraud Case.” The Washington Post, WP Company, 10 Dec. 2019, www.washingtonpost.com/climate-environment/2019/12/10/exxonmobil-wins-climate-change-lawsuit-new-york/.

Grandoni, Dino. “States and Cities Scramble to Sue Oil Companies over Climate Change.” The Washington Post, WP Company, 15 Sept. 2020, www.washingtonpost.com/climate-environment/2020/09/14/states-cities-scramble-sue-oil-companies-over-climate-change/.

“How Exxon Went from Leader to Skeptic on Climate Change Research.” Los Angeles Times, Los Angeles Times, graphics.latimes.com/exxon-research/.

Hasemyer, David, et al. “Fossil Fuels on Trial: Where the Major Climate Change Lawsuits Stand Today.” InsideClimate News, 17 Jan. 2020, insideclimatenews.org/news/04042018/climate-change-fossil-fuel-company-lawsuits-timeline-exxon-children-california-cities-attorney-general.

“Executive Leadership.” ExxonMobil, corporate.exxonmobil.com/Company/Who-we-are/Management-Committee.

Internet Encyclopedia of Philosophy, iep.utm.edu/virtue/.

“Clean Energy.” Energy.gov, www.energy.gov/science-innovation/clean-energy.

“Will Electric Vehicles Really Create a Cleaner Planet?” Thomson Reuters, www.thomsonreuters.com/en/reports/electric-vehicles.html.

 

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)