Mylan Ethics Essay

Mylan, “a global healthcare company” (“Company”, n.d.) has caused outrage over the price increase of the EpiPen product. Ethics plays a significant role in the decision-making of companies as unethical decisions may result in negative repercussions. Mylan’s unethical decision impacted various parties negatively. These parties are made up of Mylan’s stakeholders and have an adverse influence over the company in terms of sales and profit. It is thus important to uphold ethics, though it can be difficult as it is not finite.

The Mylan company has become one of the most prominent pharmaceutical companies with over 7,500 products offered in more than 165 countries and territories (“About Us”, n.d.) as a result of their foundation – a prominent

business operation (Goldman, 2017). The groundwork of Mylan was built on its founding corporate model, "we either do it right or we don't do it at all" (“SECURITIES AND EXCHANGE COMMISSION”, n.d.) alluding to their philosophy of “Doing Good and Doing Well” (“Social Responsibility at Mylan”, n.d.). This business operation influenced “the most valuable asset… our global workforce” (“About Us”, n.d.) as it is made of only the passionate and dedicated members. Hence, the business operations of Mylan lay with its foundation resulting in a company of like-minded individuals who work for the wellbeing of society.

CEO Heather Bresch’s decision raised the ethical issue of greed which impacted the involved parties negatively. The decision to raise the price of a two-pack epinephrine auto-injector by 500% (Mangan and Tirrel, 2017) from $100 in 2009 to 608 dollars by September 2016 (Kozarich, 2016) elevated concerns as users are placed at greater health risk as they lose access to this life-saving drug. Despite resulting in greater health risks, increasing prices to this extent is legal and is a common occurrence (Holbrook, 2016) within the pharmaceutical industry. Pharmaceutical companies need to justify the research, development and market approval cost, averaged at 2.558 billion (DiMasi, Grabowski and Hansen, 2016) and thus do so by price increases. This highlights an ethical dilemma as Mylan’s decision to increase EpiPen’s cost significantly may be for profit, however from the consumer’s perspective it may be greed.

Mylan stakeholders were impacted negatively by the significant EpiPen price increase.

The stakeholders impacted include, “patients, customers… communities, vendors… and investors” (“Social Responsibility at Mylan”, n.d.). Mylan’s community, (patients, customers and vendors of EpiPen) were impacted negatively, as it restricted access to the life-saving drug as a direct result of cost. Rice (2017) suggests the community are deterred by the decision and instead sought out rival and generic products such as Impax’s Adrenaclick. Impax’s Adrenaclick for its affordability achieved great recognition as it retailed at $109.99 per two-pack with the option to lower it further to $10 via coupons (Mukherjee, 2017). Adrenaclick’s price disparity to EpiPen’ contributed to the growth of alternative and generic prescriptions which Rice (2017) claimed, doubled since the start of 2016. Regarding the community of Mylan, its “patients and providers” (Rice, 2017), sought out affordable alternatives to EpiPen because of the health risk generated by Mylan’s decision. Furthermore, creditors and investors were likewise impacted negatively. The price increase of EpiPen’s by 500% within a decade sparked outrage by the community which resulted in a poor reflection of Mylan’s image. In controversies such as these where investors are impacted as market share for the companies in bad light, drop. Cigna, a major insurance company for example dropped coverage of EpiPen for Adrenaclick (Mukherjee, 2017).

Overall, Mylan’s decisions impacted stakeholders negatively as it resulted in a loss of sales, market share and investors.

Mylan’s decision to increase EpiPen price by 500% is deemed unethical and consequently sparked outrage towards the company. Kozarich (2016) utilised Nagle, Hogan and Zale’s ethicality price test, in which Mylan’s decision had violated the third and fourth test. That is, “sellers cannot exploit a buyer’s essential needs” and “the price must be justified by costs” (Kozarich, 2016) respectively. Mylan violates both tests as experts believe that the cost of manufacturing EpiPens totals to $30 (White, 2016) despite being listed as over 600 dollars. This price disparity leaves room for 160 dollars’ profit (Maremont, 2016) for Mylan, earning 1 billion annually (Reuters, 2016), allowing for Bresch’s salary to increase by 671% (Willingham, 2016) from “$2,453,456 to $18,931,068 from 2007 to 2015” (Cha, 2016). Hence, Bresch’s decision to increase EpiPen prices to an absurd amount is deemed unethical as profits were directed towards personal salary. This reflection of Mylan’s culture backfired, impacting the company negatively due to outrage by the community and media. The patients impacted by the decision look to competitor products as the price of EpiPen became too costly, this in turn led to the drop-in sales. Likewise, any controversy towards a company will impact negatively its share prices, for Mylan, the share prices were at its lowest in 30 years (Reuters, 2016). Hence overall, the impact of Mylan’s unethical decision had negative repercussions as it instead benefitted competitors.

Personally, my original view on business ethics concerned primarily with the outcome of the business decision/action.

Regarding this case, Mylan’s decision would be deemed unethical as a result of the overall negative impacts towards stakeholders, in particular the patients. After attending the lectures and completing this assignment, I discovered that my view on business ethics is in line with the teleological ethics. Teleological ethics considers only the outcomes of the decisions in justifying whether it is ethical or not (He, 2017). With regards to the Mylan case, teleological ethics would also conclude that the EpiPen price increase decision was unethical as the impacts towards their stakeholders were negative. Hence, my view on business ethics is like that of

teleological.

Hence, Mylan’s decision to raise the price of EpiPen’s is deemed unethical as it evoked ideas of greed. As the negative outcome of the decision outweighed the good, the decision is deemed unethical in accordance to the teleological ethics. The result of such a decision impacted Mylan stakeholders negatively, however certain individuals such as Bresch benefitted from the increased revenue. This clear sign of exploitation renders the decision as unethical.