THE GLOBAL BIOPHARMACEUTICAL INDUSTRY: POLITICAL, LEGAL, AND ETHICAL DILEMMAS The $1.2 billion global pharmaceutical industry includes 12 firms;…

Question Case:THE GLOBAL BIOPHARMACEUTICAL INDUSTRY: POLITICAL, LEGAL, ANDETHICAL DILEMMAS■ The $1.2 billion global pharmaceutical industry includes 12 firms; five are headquarteredin the United States, two in Switzerland, two in the United Kingdom, and one in France,Germany, and Israel. ● Pfizer (United States, www.pfizer.com)SEVERAL CHALLENGESHigh Cost of Research & Development (R&D)■ Pharmaceutical firms spend vast amounts on R&D in creating and marketing drugs, thuscharging high prices enables for cost of capital recovery and profit generation. ■ Europeand the U.S. benefit from strong patent protection laws and abundant investment capital.■ It takes 12 to 15 years, and over $1 billion in R&D expenses, to successfully bring a newpharmaceutical compound to market. ■ Only 1 in 10,000 investigated and testedcompounds is approved for patient use; only 3 out of every 10 new, approved compoundsare successful enough to recover their R&D costs.Limited Protection for Intellectual Property■ In practice, patents are frequently inadequate, especially in developing countries.■ Example- India■ Weak intellectual property protection → has discouraged R&D and innovation.■ Illicit laboratories have freely infringed on drug patents and engaged in a selling “freefor-all” in the huge Indian pharmaceutical market.■ Indian Patent Act revision revoked all patents for medicines,■ Pharmaceutical “chop shops” emerged – they reverse-engineered patented compoundsdeveloped by European and U.S. companies- sold the pirated generics at drastically lowerprices.■ The foreign pharmaceuticals launched legal actions against these violations but, in theabsence of strict patent protection and with little local competition, India’s generic drugmanufacturers flourished.The Challenge from Generic Brands■ Under World Trade Organization (WTO) rules, a patent protects a drug inventor fromcompetition for up to 20 years. ■ In reality, when the lengthy testing and approval phaseis factored in, the effective life of a drug patent is often less than 12 years, with typically 5to 8 years of patent protection in which to recover its investment before genericmanufacturers can legally enter the market.■ Patent protections are important because they encourage innovation. ■ Patent protection laws for pharmaceuticals differ substantially worldwide.■ Generic drugs- Israel-based Teva Pharmaceutical is the largest manufacturer, producinggeneric versions of more than 150 brand names, with global sales of $20 billion. U.S. -Generic medications account for over half of all dispensed prescriptions. Once a brandedcompound’s patent expires, with government approval, generic manufacturers almostimmediately start producing generic versions- then retail prices can fall by as much as 90%within 12 – 18 months. Generic manufacturers incur substantially lower marketing andsales expenses. compound’s patent expires, with government approval, genericmanufacturers almost immediately start producing generic versions- then retail prices canfall by as much as 90% within 12 – 18 months. Generic manufacturers incur substantiallylower marketing and sales expenses.■ Demand for generic drugs- exacerbated with the rising demand for medications indeveloping economies and countries with weak patent protection.Counterfeit Drugs■ Many developing-country governments fail to ensure the bioequivalence of genericsmanufactured in their countries. There is a growing industry of counterfeit and bioinequivalent medications emerging in China, Argentina, Brazil, India and other emergingmarkets, where regulatory oversight is weakest.■ China – A counterfeit ring supplied 1 million fake OneTouch Test Strips (used to treatdiabetes) to hundreds of pharmacies in Canada, India, the U.S., and numerous othercountries.■ Argentina – A healthy 22-year-old woman in died from liver failure after receiving ironinjections to treat mild anemia- the medicine she received was a highly toxic counterfeit. ■ Niger – some 2,500 people died after receiving fake vaccines for meningitis.■ European Union officials seized more than 35 million fake pills at ports around Europe,including drugs intended to treat malaria, cancer, cholesterol, and pain.■ The United Nations estimates that sales of counterfeit pharmaceuticals exceeds $500billion annually.■ The WHO (World Health Organization) estimates that up to 30% of medicines sold indeveloping countries may be counterfeit and that between 200,000 and 300,000 people dieeach year in China due to counterfeit or substandard medicine.■ Internet-based pharmacies are the worst perpetrators, with over 50% of online medicinesare fake. Threats posed by counterfeit manufacturers have compelled brandedpharmaceutical firms to spend significant resources for patent protection.Neglected Therapeutic Areas■ Pharmaceutical firms target markets that can return the cost of capital and generateprofits- e.g. a drug for cancer and cardiovascular diseases rather than poor countrydiseases, e.g. tuberculosis. ■ However, governmental and private initiatives have begun toprovide incentives to address such issues through public-private partnerships. ■ Example the Bill and Melinda Gates Foundation (www.gatesfoundation.org) is investing billions ofdollars to fight AIDS, tuberculosis, and various infectious diseases that affect developingcountries.Public Scrutiny■ Example- Public Scrutiny – the government of South Africa got into a tussle with severalmanufacturers of branded AIDS drugs. ■ When the government sanctioned non-approvedgenerics; branded pharmaceutical manufacturers sued South Africa, which created aninternational backlash against the firms.■ The result was negative publicity for branded pharmaceutical firms and people becamemore aware of the generic drug industry and its potential for helping AIDS victims.■ Brazil and several other countries threatened to break patents if pharmaceutical firmsdid not make their drugs more affordable, and the pharmaceuticals did respond by offeringAIDS drugs at lower prices in Africa. ■ The U.S. and various European governments haveprovided billions of dollars in subsidies to support AIDS treatment in Africa.The Future■ Lax intellectual property laws facilitate the production of cheap generic drugs, but withoutadequate protections, major pharmaceutical firms have few incentives to fund the requiredR&D that result in new treatments for world diseases. ■ Emerging markets, e.g. Brazil &China, are the future target markets for pharmaceutical firms, yet these countries also posesignificant challenges in terms of intellectual property protections.(Pearson 2020)QuestionI need help please with identifying and describe the ethical challenges faced by the pharmaceuticalbusinesses in international trade in terms of corruption, bribery, unethical management practices, harmful global sourcing, illicit products & marketing and intellectual property infringement.   Health Science Science Nursing UJ 123 Share QuestionEmailCopy link Comments (0)