ethical violation

Ethical Violations Within Business

One of the biggest ethical violations that occurred in 2016 was with the drug company Mylan. Mylan significantly increased the price of a life-saving product called the EpiPen, which delivers epinephrine by injection. Due to this price raise, many families are now unable to afford the EpiPen. For people that have anaphylactic reactions, the consequences of not being able to afford the medicine they need can be deadly. Mylan has been involved in several lawsuits due to their poor decisions. If Mylan had more compassion for their customers, they would not have lost so much business due to their poor ethical skills.

Mylan is a global healthcare company that was founded in West Virginia in the year 1961 (Mylan Worldwide, n.d.). According to their website, they offer products in one hundred and sixty-five countries and territories with more than seven thousand five hundred marketed products. This company produces the most popular epinephrine autoinjector, which is called the EpiPen. This product is designed for people with anaphylaxis, which is a severe allergic reaction that can be life-threatening (Anaphylaxis, 2017). Anaphylaxis requires an injection of epinephrine and immediate treatment.

Epinephrine auto-injectors are necessary for people with severe allergies and many of them are children. Raising the price of an essential medicine that saves the lives of children is a violation of ethics. One in thirteen children suffer from food allergies in America (Matthews & Heimer, 2016). The price of the EpiPen has grown from $100 in 2009 to $600 in 2016 for the exact same product (Lyon, 2016). This extreme raise in price forces some families to choose between their medication and other necessities. According to Fortune.com, “Many American families, especially those with high-deductible health insurance, struggle to afford the $500 sticker price for the life-saving drug. And with Mylan controlling a near-monopoly on such products, consumers were stuck between a rock and a hard place” (Matthews & Heimer, 2016).

Mylan having control of a near monopoly on epinephrine auto-injectors is what allowed them to skyrocket their prices. When Mylan first came out with the EpiPen, the market for epinephrine was huge, around two hundred and seven million dollars a year (Johnson & Ho, 2016). Their competitors have dwindled over time because their main competitor, Twinject, was discontinued in 2012 and another brand called Auvi-Q was recalled in 2015 due to the fear that the product would administer the wrong dose (Johnson & Ho, 2016). According to The Wahington Post, Teva Pharmaceutical Industries was also developing a generic auto-injector but it was rejected for major deficiencies which delayed the launch of the product to 2017.

In 2009, Mylan introduced a new version of the EpiPen with patent protection, which made it harder for competitors to produce a generic version (Johnson & Ho, 2016). They also raised the price by twenty percent once they realized that they had a monopoly over the auto-injector market. Due to this monopoly, Mylan still continued to raise prices three hundred dollars to six hundred dollars over the next two years (Kozarich, 2016). After they dramatically raised prices it caused the company to lose over three billion dollars in market cap, so they decided to release a generic brand with a smaller list price to rectify the situation. These outrageous and unnecessary price increases show that Mylan was making unethical decisions for monetary gain.

This company has also been hit with several lawsuits following their poor business decisions. The scandal prompted investigations concerning whether the company committed antitrust violations and Medicaid fraud (Matthews & Heimer, 2016). A class-action lawsuit that was filed against Mylan claims that the increased price of the EpiPen was the result of their payments and rebates to pharmacy benefit managers, which is illegal as it violates protection laws of all U.S. states (Mangan, 2017). It seems that the pharmaceutical company has been blaming others for their pricing. With all the lawsuits that are taking place against the company, hopefully they will admit their mistakes and work on providing lower cost medicines for their consumers.

If Mylan had better ethical standards within their company, these lawsuits could have been avoided. For a business to be truly successful, it is important for them to be transparent about their pricing, business procedures, and products. I think that the company should have kept their prices the same even after the other competitors were discontinued or recalled. Epinephrine is a relatively inexpensive product to manufacture, so the price increases cannot justified. It is their job as a business to make money but it is also an ethical standard to be fair to their customers. Mylan’s ethical violations show the world that just because you hold a monopoly over the market, “pricing moves must be carefully considered and communicated in a way that demonstrates ethical behavior in the best interest of both the consumer and the company” (Kozarich, 2016).

So, in conclusion, Mylan was shown to violate ethical standards within their business. They were unfair to their consumers as well as their competitors. Keeping their medicine from being affordable to people that could potentially die without it is extremely unethical for a business. They are facing the consequences from their poor decisions such as losing money in the market as well as losing money in the stock market. They are also facing several law suits. This companies unfortunate ethical decisions impacted them in a negative way, which shows that a business needs ethics in order to be successful.

References

Anaphylaxis. (2017, February 14). Retrieved June 22, 2017, from