LCHM Summer 2017 - 31

L C M E D S O C .O R G

interest, regardless of who the interest is If one was to argue that the shareholders
dictated by (e.g. church, dictator, majority). should then take on the social responsibility
In an ideal free market dependent on private of capping drug prices, then the incentive
property, the political principle of unanimity to enter the pharmaceutical industry by
is at play and all cooperation is voluntary. founding a corporation or purchasing shares
Consequently, no individual can coerce any is drastically diminished. If the incentive
other, and there are no social responsibilities to enter the industry declines, then basic
in any sense other than the shared responsi- supply-and-demand economics dictates
bilities of individuals. By forcing the market that the decreased supply would drive drug
to align with social objectives, we can no prices up regardless. So, if Shkreli was not
longer run an ideal free market.
acting out of line in his drug price hikes,
where does the real problem lie?
Currently, political mechanisms and
market mechanisms are distinct, and thus
To answer that question, one must unsociety may be defined as a collection derstand that the business strategy of Turing
of individuals and of the various groups Pharmaceuticals was one of obtaining licenses
they voluntarily form. When the political on out-of-patent medicines, which typically
mechanism starts to drive the free market, have small markets and high expenses for
the market is no longer free. And since the obtaining regulatory approval for generic
market is theoretically made up of voluntarily
formed groups of individuals, would we
truly be able to claim that the individual
in this market is free?

manufacturing, and price hiking the drug.
With closed distribution and no competition, Turing's price hikes would generate
unbelievable profits, at the expense of the
customers. This strategy is legal, and thus
Shkreli is not to blame. However, laws ideally
should reflect the value system of the society.
If society is not content with Shkreli's price
hikes, we should instead look at modernizing
our pharmaceutical patent laws and FDA
regulatory approval pathways for generics,
but that is a topic for another debate.
Jonathan Hunt is a 4th year MD/MBA
student attending the St. Luke's Regional
Campus of the Lewis Katz School of Medicine
at Temple University. His academic interests
include healthcare systems-level innovation
and policy reform.

What exceptions exist to this obligation?
As long as the agent acts in the interests
of his principal, the obligation is fulfilled.
If a pharmaceutical corporation's owners
were to voluntarily commit to an interest
of maintaining low drug prices, the CEO
must act in this interest and all stakeholders
may interact with this corporation with the
knowledge of the potential impact of the
aforementioned interest.
Other notable exceptions include eleemosynary institutions, such as a hospital
or a school, where the rendering of certain
services are explicitly prioritized by all stakeholders above the maximization of profits.
Conclusion
Martin Shkreli was the CEO of Turing
Pharmaceuticals in 2015 when the Daraprim
price hike was executed. As an agent of his
principal, he acted in the interests of the owners of Turing Pharmaceuticals, specifically of
profit maximization. If we follow the line of
reasoning set by Friedman, Shkreli's actions as
the CEO of Turing Pharmaceuticals cannot
reflect on his individual commitment to his
social responsibilities, as his responsibility
in the corporation is to the shareholders.
SUMMER 2017 | Lehigh County Health & Medicine 31


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Table of Contents for the Digital Edition of LCHM Summer 2017

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