Case Analysis: Prescription Price Gouging (4 pages)
Develop a 4 page analysis (double spaced)
Directions: Develop an analysis of the Prescription Price Gouging case study located in this module. As part of your analysis, be sure to address the following (Note: There is no need to concern yourself with any discussion questions that may be in the case):
* Clearly and effectively apply the concepts from this weeks chapter on “Ethics, corporate social responsibility, environmental sustainability and strategy” to the case
* Apply the strategic analysis text tools (i.e. see potential list provided)
* Perform real analysis on the case (tables/charts/financial analysis)
* Charts and tables need to be professionally assembled with effective titles and labels
* Avoid retelling the case and assume the professor has read it
* Provide a set of clear and specific recommendations to move the organization forward.
* 12 pt font, times roman, title page, no headers or footers
* Avoid cut-and-paste of charts, pictures from another source (your own creative work is needed).
* Is well organized with section titles
* Strategic management terms need to be used to support your thoughtful ideas.
* Avoid a conversational/first person tone in an analysis
Select at least three of the following Strategic Analysis Tools. Be sure that the focus of your analysis is on the following strategic analysis tools. In addition, please make these some of your papers section titles.
Vision/mission/core values/objectives development process
Corporate Social Responsibility
Business ethics and practices
Schools of ethical thought (i.e. Universalism, Relativism, Social Contract)
Ethics code litmus test
Drivers of unethical behavior
Moral vs business case for ethical strategy
Triple bottom line
Implied social contract
PESTEL
Five forces analysis
“Weapons” to compete with rivals
Competitive pressures from sellers
Common drivers for industry change
Strategic group mapping (bubble map)
Competitor analysis
Key success factor analysis
Financial analysis
Competency and capability analysis
SWOT analysis
Value chain analysis
Competitive strengths assessment
Generic strategy analysis
Cost driver analysis
Marketing tactics (first strike, guerilla, others)
Defensive strategies
First mover strategies
Strategic alliances, outsourcing, partnerships, acquisitions, new ventures
Apply strategic options in an international environment
Prescription Price Gouging: A Need for Good
Government or Good
Corporate Citizens?
Case
Author: Pamela E. Queen
Online Pub Date: January 02, 2018 | Original Pub. Date: 2018
Subject: Corporate Social Responsibility, Business & Management, Business, Government, & Society
Level: Intermediate | Type: Indirect case | Length: 4335 words
Copyright:
© Pamela E. Queen 2018
Organization: Government| Pharmaceutical Industry| Society | Organization size: Medium| Large
Region: Northern America | State:
Industry: Manufacture of basic pharmaceutical products and pharmaceutical preparations
Originally Published in:
Publisher: SAGE Publications: SAGE Business Cases Originals
DOI: http://dx.doi.org/10.4135/9781526446305 | Online ISBN: 9781526446305
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http://dx.doi.org/10.4135/9781526446305
© Pamela E. Queen 2018
This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion
or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein
shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use
only within your university, and cannot be forwarded outside the university or used for other commercial
purposes. 2019 SAGE Publications Ltd. All Rights Reserved.
This content may only be distributed for use within Franklin Pierce University.
http://dx.doi.org/10.4135/9781526446305
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http://dx.doi.org/10.4135/9781526446305
Abstract
Sara, a research and development (R&D) manager at one of the top pharmaceutical companies
in the U.S., was surprised to see her cousin Rachel, who lives in a neighboring state, featured
on a news segment personalizing the impact that high prescription drug prices have on ordinary
families. Rachel demonized the pharmaceutical industry for its excessive price increases on crit-
ical medicines that average families need. Rachel wants to see more government action to cur-
tail price increases for prescription drugs, especially for critical, life-saving medicines. In her role,
Sara has little impact on the pricing model her company uses for prescription drugs, but knows
that most new drugs do not make it to market with about 1 in 5,000 drugs successfully com-
pleting clinical trials, FDA approval, and becoming profitable. Sara knows first-hand that many
pharmaceutical companies engage in little-known corporate social responsibility (CSR) initia-
tives that greatly help society. So, the profits made by these companies are shared with a global
community. Sara wants to encourage her company to expand its CSR efforts and educate her
cousin and others about CSR initiatives of the pharmaceutical industry. Both women are spurred
to action in opposing directions—Rachel pursuing a government solution of effective legislation
and Sara seeking a business solution of greater CSR activities. This case explores interdepen-
dencies between business, society, and government to achieve public good. Students examine
whether government actions with providing patents and exclusivity marketing rights for phar-
maceutical companies actually foster price monopolies; debate expectations of pharmaceutical
companies to earn profits, as compensation for uncertainty, innovation, and costs associated
with R&D of new prescription drugs; explore whether larger profits of pharmaceutical companies
are justifiable; and better understand interdependences between business and society.
Case
Learning Outcomes
After completing this case, students should better recognize and grasp the following:
• The unintended consequence that government actions to promote innovation and protect intellectual
property may cause price monopolies.
• The public expectations for greater corporate social responsibility (CSR) efforts from the pharmaceu-
tical industry.
• The expectations of corporations to make a profit and to be compensated for risks associated with
uncertainty, innovation, and research & development activities.
• The complex interdependencies between business, government and society.
Introduction
One weekday evening, Sara was home in time to watch the evening news with her family. In a news segment
about the impact of high prescription drug prices on ordinary families, she was surprised to see her cousin
Rachel, who lives in a neighboring state.
As a high school biology teacher, Rachel described how she must forgo saving for her daughter’s college edu-
cation because she can no longer afford the high cost of her epinephrine auto-injector (EpiPen), a medication
used in emergencies to treat very serious allergic reactions to insect bites, food, drugs, or other substances.
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When an allergic reaction ensues, epinephrine acts quickly to improve breathing, stimulate the heart, raise
blood pressure, reverse hives, and reduce swelling of the face, lips, and throat. The EpiPen is a life-saving
medication. Rachel had been able to afford this medication for her daughter until 2007, when Mylan acquired
it. The price subsequently increased from $104 to more than $600. As Figure 1 highlights, many Americans
must modify their medical regiment, reduce spending habits and forgo modest indulgences in order to afford
price increases for prescription drugs. In the news story Rachel demonized all pharmaceutical companies and
questioned how any company could put profits over the basic health needs of people. She stated that she has
made it her mission to get legislation passed to control prescription drug prices in her state and throughout
the country. Rachel indicated that she has meetings scheduled over the next few weeks with her state and
federal legislators to craft legislation to address this important issue.
Figure 1: Consumer Reports—Personal Actions Taken to Pay for Prescription
Drugs (2015)
Source: Consumer Reports Best Buy Drugs Tracking Poll 6, conducted April 16–26, 2015. Retrieved from
https://www.consumerreports.org/cro/news/2015/08/are-you-paying-more-for-your-meds/index.htm
Sara, a research and development (R&D) manager at one of the top pharmaceutical companies in the United
States (U.S.) was relieved that her company was not featured in this news segment. However, she had an
uneasy feeling that her cousin’s comments were aimed directly at her and her employer. In her managerial
role, Sara has little involvement in the pricing of prescription drugs. As a R&D manager, Sara oversees the
development of new drugs and improvement of existing ones; she compiles, analyzes, and reports data from
theoretical research and clinical trials to assess the readiness of the drugs for market or refocus the direction
of research. While Sara sympathizes with her cousin’s plight, there is little that she can do to set the drug’s
selling price. She acknowledges that Americans pay more for prescription drugs than residents of other coun-
tries (see Figure 2), but U.S. drug companies also spend millions of dollars on R&D that is not recouped. After
all, most new drugs do not make it to market; only about 1 in 5,000 drugs successfully completes clinical trials
and gains profit for the pharmaceutical company (Petrova, 2014). In addition, many pharmaceutical compa-
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https://www.consumerreports.org/cro/news/2015/08/are-you-paying-more-for-your-meds/index.htm
nies are engaged in less-publicized corporate social responsibility (CSR) activities like decreasing prices on
essential prescription drugs, conducting research on medications with low profit potential, and facilitating ac-
cess to medication in developing countries.
Figure 2: OECD Per Capita Health Expenditures on Pharmaceuticals by Coun-
try (2015)
Source: Organisation for Economic Co-operation and Development (OECD) Health Statistics—2017.
In the aftermath of criticism from consumers and politicians on the steep price increases for EpiPen that has
no generic version, Mylan issued coupons covering up to $300 of the product’s cost for consumers with high-
deductible insurance plans. Also, Mylan increased the income level for eligibility in its patient assistance pro-
gram; certain users can receive EpiPens for free (Hufford & Rockoff, 2016).
Overview of Prescription Drug Pricing in the United States
According to the Campaign for Sustainable Rx Pricing (CSRxP), the prescription drug market in the U.S. is
broken, with little competition to keep prices down, no cost controls to limit price increases, and limited trans-
parency on the pricing models used by pharmaceutical companies (Tarallo, 2017). Like Sara, pharmaceutical
companies contend that high drug prices are warranted because the costs of R&D of new, more advanced
medications are ever-increasing because of the need to provide medications for an aging population and to
achieve advances in fighting off life-threatening diseases.
In an effort to promote R&D, advance medical innovations, and encourage companies to invest resources
and time without the certainty of success, pharmaceutical companies receive attractive patent protections for
new drug development and manufacture. Only the pharmaceutical company holding the patent is allowed
to manufacture and market under its brand name and gain profits during the life of the patent, which varies
among countries and by drugs. In the U.S., the lifetime patent period is typically 20 years; the effective patent
period, the length of time after the drug has successfully completed clinical trials and received Food and Drug
Administration (FDA) approval for usage and marketing, ranges from seven to twelve years. The pharmaceu-
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tical company that develops a brand-name drug has a period of market exclusivity, or monopoly, in which the
company is able to set the price of the drug at a level that maximizes profit and recovers R&D costs, produc-
tion costs, and failed clinical trial attempts (McCall & Quinn, 2017).
To maximize their success and eventually make a profit, pharmaceutical companies strategically invest in
drug candidates with strong patent protection to recoup their development costs. The average costs to phar-
maceutical companies for discovering, testing, and obtaining regulatory approval to produce brand-name
drugs is steadily increasing. Costs rose from $800 million in 2003 to $2.6 billion in 2014 (DiMasi, Hansen,
& Grabowski, 2003; Tufts Center for the Study of Drug Development, 2014). Considering the R&D costs of
bringing a new drug to market, only two of ten marketed drugs ever return revenues that match or exceed
costs.
Based on a 2016 study by the Tufts Center for the Study of Drug Development in Boston, the process to bring
new prescription drugs to market is well over 10 years. The timeline is due to research and clinical trials re-
quired to ensure the safety and efficacy of the drug (AARP Bulletin, 2017). According to this study, initial R&D
time extends an average of 31 months; the first clinical trial on healthy volunteers takes another 20 months;
a second clinical trial conducted on 100–300 volunteers with the targeted disease adds another 30 months;
the third clinical trial, conducted on 1,000–3,000 volunteers with the targeted disease to determine efficacy
and dosage levels, typically lasts 31 months. Finally, before the drug may be sold, it must go through a FDA
submission and approval process; dependent upon the review type (standard review or priority review), this
process may take up to 10 month to approve a new drug application and may require additional post-approval
clinical trials during the first three years of product sales to the public. Figure 3 depicts these phases.
Figure 3: FDA Drug Approval Process
Source: FDA.org. Retrieved from: https://www.fda.gov/Drugs/ResourcesForYou/Consumers/ucm289601.htm.
Factors Impacting Prescription Drug Pricing
The Journal of the American Medical Association (JAMA) outlines key factors that contribute to high prices of
prescription drugs in the U.S. (Lupkin, 2016):
1. U.S. drug manufacturers set their own prices. This is not the norm elsewhere in the world.
In countries with national health programs, government entities negotiate drug prices or
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https://www.fda.gov/Drugs/ResourcesForYou/Consumers/ucm289601.htm
decide not to cover drugs with excessive prices. No similar negotiation happens in the
U.S. Per the 2003 Medicaid Part D provision, the government is barred from negotiating
drug prices. Instead of using its vast purchasing power to negotiate better pricing deals,
the government allows insurance companies providing Medicare Part D coverage to han-
dle drugs pricing (Silverstein, 2016). In addition, Medicaid must cover all drugs approved
by the FDA, regardless of whether a cheaper, equally or more effective drug is available.
2. The time periods of patents and market exclusivity are lengthy. As noted above, patents
granted by the U.S. Patent and Trademark Office for new brand-name drugs extend about
20 years during their development, testing, and manufacture. In addition, the FDA grants
exclusive marketing rights to new drug applicants upon FDA approval of drug use and
sales to the public. Both patents and exclusivity are intended to promote innovation, pro-
tect intellectual rights, and enable drug manufacturers to recoup costs for discovery, de-
velopment, and testing of new drugs. A study finds that once patent protections end, drug
prices decline to 55% of their original brand name cost once two generics hit the market;
and to 33% when five generics are available (Lupkin, 2016).
3. The time period of FDA approval of generic drugs. Due to application backlogs at the
FDA, it takes about 4 years for generic drug manufacturers to gain approval to make
brand-name drugs that are no longer under patent. Generic drugs typically refer to a phar-
maceutical drug that is equivalent to a brand-name product in dosage, strength, method
of administration, quality, performance, and intended use; generics must contain the
same active ingredients as the original brand-name formulation (FDA, Generic drugs).
4. Unintended consequences of well-intended federal and state laws, limit use of generic
drugs. Pharmacists in 26 states are required by law to get patient consent before switch-
ing to a generic drug. When patient consent is not obtained, Medicaid must pay for the
costlier brand name drug even if a cheaper product is available. In 2006, Medicaid costs
for just one brand name drug, Zocar, were $19.8 million even when the generic statin
Simvastatin was available (Lupkin, 2016).
5. Lack of transparency into justification for high prices charged by pharmaceutical manu-
facturers. For new brand drug manufacturers, these companies garner profits that far ex-
ceed costs for R&D. According to several studies, the claim that high prescription drug
prices are defensible due to high R&D costs is not accurate because scientific research
leading to development of new drugs is often funded by the National Institutes of Health
via federal grants or by venture capitalists (Lupkin, 2016). For example, drug manufactur-
er Gilead acquired the drug Sofosbuvir, which treats hepatitis C, after the original re-
search was conducted in academic laboratories, so their R&D costs were minimal.
For generic drug manufacturers, increases in drug prices are on the rise due to reduced competition, potential
collision, and responses to market forces. Less competition in the generic drug industry due to acquisitions
within the pharmaceutical industry and smaller firms leaving the market gives the remaining generic drug
manufactures greater leverage to substantially raise prices. For some generic drugs, the market is so small
that it does not attract multiple producers (Sarpatwari, 2015). Potential collision between companies may
have attributed to price increases for generic drugs. Per a 2014 settlement by New York attorney general
Eric Schneiderman, generic drug manufacturers were joining forces to keep prices high via a collision agree-
ment to protect each other’s market positions (Schneiderman, 2014). Another reason, according to William
Comanor, head of pharmaceutical economics and policy studies at UCLA, is generic drug prices may have
dropped too low to be sustainable (Lazarus, 2014). A downside to competition is that it’s hard to make a lot of
money when products sell for so little. So, companies are forced to raise prices to stay in business.
Prescription Drug Legislation
Because pharmaceutical companies contend that drug prices are increasing due to underlying cost increases,
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lawmakers at both federal and state levels are requiring more transparency in prescription drug pricing. At the
federal level, the Fair Accountability and Innovative Research (FAIR) Drug Pricing Act championed by Sen-
ators McCain and Baldwin and Representative Schakowsky requires drug manufacturers to notify the U.S.
Department of Health and Human Services (HHS) and submit a transparency and justification report 30 days
before they increase the price of certain drugs. In addition to providing justification for the price increase, the
report must disclose manufacturing, R&D costs for the qualifying drug; net profits attributable to the qualifying
drug; marketing and advertising spending on the qualifying drug; and other information deemed appropriate.
This legislation does not prohibit manufacturers from increasing prices; instead, it gives consumers notice of
price increases and provides information to the market. Proponents believe that this legislation will create ed-
ucated consumers and build a functional prescription drug market (Tarallo, 2017).
Others assert that more legislation is needed to directly limit prescription drug price increases. Specifically,
this would include allowing the federal government to negotiate Medicaid Part D drug prices, permitting import
of drugs from Canada, and educating the public with research that compares the efficacy and safety of brand-
name, generic, and off-patent drugs. Such steps would foster price competition and reduce unnecessary
spending on marginally different drugs. A Kaiser Family Foundation poll in 2015 found that 93% of Democrats
and 74% of Republicans favor letting the government negotiate prices for Medicaid Part D (Silverstein, 2016).
Yet legislation to allow government negotiation of prescription drugs has not gained traction. Strong lobby-
ing on behalf of pharmaceutical companies is believed to lessen legislative actions that negatively impact the
pharmaceutical industry. Per the Center for Responsive Politics, in 2017, the Pharmaceutical/Health Products
Industry topped all industries with $144.8 million in lobby spending with the Insurance Industry as the second
highest at $78.8 million (CRP, 2017).
Federal legislative efforts to import prescription drugs from Canada have also faced barriers, one of which is
that drug importation into the U.S. has been illegal since 1987; no drug without direct FDA approval for use
or sale can be imported into the U.S. Figure 4, a Twitter post from Senator Bernie Sanders illustrates differ-
ences in the prices of common prescription drugs in the U.S. and Canada. Although drug prices in Canada
are typically one-third of their cost in the U.S., recent exchange rate variances have made this difference even
more dramatic. However, Canada allows drugs to be imported from other countries, which furthers the FDA’s
assertion that it cannot ensure the safety and effectiveness of drugs that it has not approved. The FDA warns
that it lacks the manpower to ensure the safety of drugs that enter Canada from other nations.
Figure 4: Drug Prices: Canada vs. USA (2016)
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Source: Bernie Sanders’s Twitter Post. Retrieved from https://pics.onsizzle.com/drug-prices-canada-vs-usa-
epipen-for-anaphylaiis-290-620-11971597
In the absence of further federal action, states are attempting a variety of approaches to address their spend-
ing increases for prescription drugs. In 2017, state legislators introduced 80 bills to address the rising costs
of prescription drugs. Vermont led the way in 2016 by enacting a price transparency law requiring drug man-
ufacturers to provide justification for price increases. Other states have also addressed this issue:
• Utah directed its Department of Health to explore a drug importation program that could be certified
by the federal government.
• Montana established an interagency committee to study drug pricing cost trends to forecast future
state spending.
• New Mexico approved an interagency study to identify ways to reduce costs of prescription drugs on
state programs
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https://pics.onsizzle.com/drug-prices-canada-vs-usa-epipen-for-anaphylaiis-290-620-11971597
https://pics.onsizzle.com/drug-prices-canada-vs-usa-epipen-for-anaphylaiis-290-620-11971597
• Maryland authorized its State Attorney General to penalize drug manufacturers for excessive in-
creases in the prices of essential generic and off-patent medications, the most notable example be-
ing the EpiPen (NASHP, 2017).
Corporate Social Responsibility—Prescription Drug Pricing
Despite much of the recent “bad press” for pharmaceutical companies, many of them repeatedly appear on
Corporate Responsibility Magazine’s 100 Best Corporate Citizens List. Being a good corporate citizen is a
goal of most leading organizations, but actually achieving this accolade can be a challenge. Business opera-
tions are complex. There are many working pieces in business operations—risk management, diversity and
inclusion, environmental protection, quality controls, and supply chain issues, just to name a few—that make
efficient and effective operations quite onerous. So when a company succeeds at being transparent, respon-
sible, and accountable in all categories, they justifiably earn coveted recognition as good corporate citizens.
CSR activity is especially important for pharmaceutical companies because their business decisions directly
impact human health. In response to criticism about prohibitively high prices and sluggish responses to de-
mand by poor populations for access to life-saving drugs, pharmaceutical companies have significantly in-
creased CSR efforts in the past two decades, particularly in low- and middle-income countries (LMICs) that
bear a significant majority of the global disease burden (Droppert & Bennett, 2015).
In the past several years, the following firms were most consistently ranked among the top 10 largest multina-
tional pharmaceutical companies: GlaxoSmithKline, Johnson and Johnson (Janssen), Merck & Co., Novartis,
Pfizer, Roche, and Sanofi. All of these firms have active CSR programs related to health projects in LMICs,
one of the criteria for inclusion in the ranking. They employ CSR in order to integrate social concerns into
their corporate strategy, as opposed to simply providing philanthropic donations unconnected to their mission
strategy (Droppert & Bennett, 2015).
A little-known example of CSR activity was conducted by Merck is the development of treatment for onchocer-
ciasis (river blindness). In the late 1980s, Merck faced the question of whether or not to invest in R&D for a
drug that could help treat onchocerciasis. The total potential market would be limited to sick populations in
poor, remote areas of developing countries; at an estimated 80 million people, this represented less than 2%
of the world’s population. The potential patient population would be unable to afford the drugs, there would be
no affluent patients to subsidize the treatment for the poor sick population, and the impacted countries were
poor and unable to subsidize the costs. All of this made the investment unprofitable. Even if an effective drug
were produced, distribution channels, infrastructure, and medical care providers would need to be created to
deliver it.
Despite all these challenges, Merck proceeded with the R&D to develop Mectizan. When it was time to distrib-
ute and administer the drug, neither governments nor non-governmental organizations (NGOs) were willing
to invest the necessary resources. Merck decided to give away the drugs for free and created a donation
program to do so. Since the program was developed in 1987, Merck has donated 2.5 billion tablets of Mec-
tizan (nearly 700 million approved treatments). In addition to donating the $3.9 billion worth of tablets, Merck
has invested approximately $35 million in direct financial support for the Mectizan Donation Program (Global
Health Policy at NYU-Wagner, 2009).
As pharmaceutical firms experience societal pressures to act responsibly, their CSR strategies (Droppert &
Bennett, 2015) include:
• Differential product pricing schemes across the globe in which the same product is sold at different
prices according to a country’s economic viability;
• Product donation programs providing certain drugs or vaccinations at no cost for patients;
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• Specialized research to address diseases that exclusively or disproportionately affect developing na-
tions; and
• Community support and outreach through mobile health initiatives, training health providers, and mi-
croloans to open accredited pharmacies in developing countries.
What Should Sara and Rachel Do?
Before watching the news story Sara felt compelled to have her employer do more; her goal is for her employ-
er to become the premier leader among Big Pharma companies in CSR initiatives. Sara begins to joint down
her “talking points” for a meeting with company executives. Sara needs to prepare a compelling business and
social case for expanding her company’s CSR activities. So, she wants to outline a new CSR program that
would be a “big bang” for her company and help ordinary families, like Rachel’s.
Likewise, Rachel begins drafting her legislative priorities for a meeting with federal and state legislators who
expressed interest in sponsoring legislation to curtail rising prescription drug prices. Rachel wants new leg-
islation that would help ordinary families get relief from rising drug costs; she believes the pharmaceutical
industry would aggressively oppose any legislation, but hopes Sara might have some insights on the best
course of action.
Sara phoned her cousin, Rachel who was eager to talk. The conversation begins “Hi Rachel, this is Sara, I
saw you on the evening news …”
Discussion Questions
From the perspective of Rachel or Sara, discuss how best to address increasing prescription drug prices in
the U.S. from either: government actions (federal or state legislation) or business actions (CSR activities).
Select one discussion question or as assigned from below:
Government—Legislative Approach
1. Discuss advantages and disadvantages of federal and state legislation on negotiating
drug prices and price coverage limits. How does this approach curtail prescription drug
prices increases for ordinary families?
2. Discuss advantages and disadvantages of federal legislation to shorten time period of
patents and market exclusivity rights. How does this approach curtail prescription drug
prices increases for ordinary families?
3. Discuss advantages and disadvantages of federal legislation to shorten time period of
FDA approval of generic drugs. How does this approach curtail prescription drug prices
increases for ordinary families?
4. Discuss advantages and disadvantages of federal and state legislation to remove patient
consent requirements for switching to generic drugs. How does this approach curtail pre-
scription drug prices increases for ordinary families?
5. Discuss advantages and disadvantages of state legislation on price transparency laws
that require drug manufacturers to provide justification for price increases. How does this
approach curtail prescription drug prices increases for ordinary families?
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Business—CSR Approach
1. Discuss advantages and disadvantages of a CSR program in the U.S. based upon a dif-
ferential product pricing scheme for certain drugs. Would this approach enable the com-
pany to make a profit, curtail price increases, and enhance its CSR status?
2. Discuss advantages and disadvantages of a CSR donation program in the U.S. that pro-
vides certain drugs at no cost for patients. Would this approach enable the company to
make a profit, curtail price increases, and enhance its CSR status?
3. Discuss advantages and disadvantages of a CSR program providing specialized re-
search to address diseases that exclusively or disproportionately affect underserved com-
munities in the U.S. Would this approach enable the company to make a profit, curtail
price increases, and enhance its CSR status?
4. Discuss advantages and disadvantages of a community outreach CSR program that sup-
ports mobile health initiatives, training local health providers, and funding local health ed-
ucation initiatives. Would this approach enable the company to make a profit, curtail price
increases, and enhance its CSR status?
References
AARP Bulletin. (2017, May). Why our drugs cost so much. Retrieved from http://www.aarp.org/health/drugs-
supplements/info-2017/rx-prescription-drug-pricing.html
Center for Responsive Politics (CRP). (2017, August 7). Lobbying: Top industries. Retrieved from
https://www.opensecrets.org/lobby/top.php?indexType=i&showYear=2017
DiMasi, J. A.Hansen, R. W., & Grabowski, H. G. (2003). The price of innovation: New estimates of drug de-
velopment costs. Journal of Health Economics, 22, 151–185.
Droppert, H., & Bennett, S. (2015). Corporate social responsibility in global health: An exploratory study of
multinational pharmaceutical firms. Globalization and Health, 11, 15.
Global Health Policy at NYU-Wagner. (2009, November 23). The pharmaceutical industry: Possibility of
corporate social responsibility? Retrieved from https://globalhealthpolicynyu.wordpress.com/2009/11/23/the-
pharmaceutical-industry-possibility-of-corporate-social-responsibility/#_ftn1
Hufford, A., & Rockoff, J. (2016, August 25). Mylan expanding eligibility for EpiPen financial assistance after
backlash. Retrieved from http://www.marketwatch.com/story/mylan-expanding-eligibility-for-epipen-financial-
assistance-after-backlash-2016-08-25
Lazarus, D. (2014, October 20). What’s behind the huge price jump for some generic drugs? Los Angeles
Times. Retrieved from http://www.latimes.com/business/la-fi-lazarus-20141021-column.html
Lupkin, S. (2016, August 23). 5 reasons prescription drug prices are so high in the U.S. Retrieved from
http://time.com/money/4462919/prescription-drug-prices-too-high/
McCall, A., & Quinn, G. (2017, March 12). The FDA process, patents and market exclusivity. Retrieved from
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http://dx.doi.org/10.4135/9781526446305
- Prescription Price Gouging: A Need for Good Government or Good Corporate Citizens?
Case
Abstract