Last month the Smurfit Business School in UCD hosted a fascinating seminar on “making highly effective biotechnology drugs affordable”, featuring speakers Thomas Pogge of Yale University, Jan Rosier of UCD and Thomas Donaldson of Wharton Business School.
Jan Rosier spoke first, providing an introduction to the issue of drug pricing. He stressed that medicines are not a standard product, they carry a “moral weight that transcends cost-benefit analysis”. He suggested that the “status quo is unsustainable” and offered two questions which set the tone for the remainder of the seminar:
- How can drug firms be rewarded for innovation?
- What is the business of biotech for?
Thomas Pogge took on the first question with his presentation on the Health Impact Fund (HIF), a fund which will offer annual rewards to companies that register their new medicines with it. In exchange, the manufacturers must sell the drug at the lowest feasible cost. Companies are rewarded according to the “social value” of their efforts. The aim of the HIF is encourage the production of drugs for the poor, to counteract the current incentives to manufacture drugs for the rich.
Currently, funding is being sought for a “mini-HIF”, to demonstrate the viability of the project. When the mini-HIF is underway, innovators will be invited to send in their proposals for new drugs, outlining the projected health impact for poor countries. Details are all on the HIF website: http://healthimpactfund.org/
Pogge’s website also offers links to his voluminous back catalogue of work on global justice and moral philosophy:
Thomas Donaldson, a Professor of Business Ethics at Wharton Business School, then spoke on the ethics of the pharmaceutical business. He began by highlighting the case of Valeant Pharmaceuticals, guilty of racheting up it’s drug prices earlier this year:
Drawing from the business ethics literature, Donaldson suggested that a “theory of the firm” does not equal a “theory of business” and that a new theory of business is required. His proposition, the subject of his latest paper, is that business responsibilities be linked to “intrinsic values” e.g. human rights. The business thus has two purposes, as Prof. Donaldson explained:
“A firm holds two interrelated purposes – one a focal purpose, a purpose that reflects its work in society and two, a contextual purpose, a purpose that reflects its work for society”
If that all sounds a bit complex (which it does to me), here’s a link to the article, which no doubt explains it better:
Finally, for those very interested in access to medicines, here’s a detailed report from the World Health Organisations on drug pricing in Europe, which gives an insight into how it all works and offers ideas for future research: