Q. Life saving medicines often cost a fortune even though the production cost is minimal. Is this ethical?
A. The situation you describe is indeed very common. The reason is that drug companies take out patents on these innovative compounds. Thus they have a monopoly for a period of years, enabling them to charge rates way above production cost. The rationale for giving drug makers (and other innovators) such a monopoly is that it will give them a fair incentive to undertake the research and development costs necessary to create new and valuable inventions. Development and particularly testing costs for new medicines are astronomical.
We actually touched on this topic in a tangential way in a previous column on the topic of evicting poor tenants. I want to cite the relevant passage from that column and then elaborate a bit.
While society definitely has an obligation to protect the needy and keep them from being cast into the street, it's neither fair nor practical to expect this obligation, which applies to us all, to be borne solely by the landlords.
At the same time, it won't do for landlords to stubbornly stand on their rights, insisting that the property is theirs and they have the right to decide on the tenants and on the rental. Our Sages, following the Prophets, attributed the destruction of Jerusalem two thousand years ago to the low ethical standards of the residents. In particular, they said, "Jerusalem was destroyed because people insisted on strict justice, and were not willing to compromise." Property owners have to recognize that even if the war against homelessness is not theirs to fight, they are the ones on the front lines of this battle.
Other groups find themselves in a situation similar to yours. Employers cannot be solely responsible for helping the unemployed and drug companies cannot be solely responsible for providing medication to the needy, but they are in the front line. I think that you can learn from some methods used by these groups. For instance, many downsizing employers invest in outplacement services, helping laid-off workers to find new jobs or to acquire new skills. Some drug companies have tried to form alliances with NGO's (non-governmental organizations) who are working to improve medical care for the needy.
The implication is that drugs need to be made available to the needy, but it is unrealistic to place the entire burden on drug companies. At the same time, drug companies should play a leading role in the effort. Let us elaborate the Jewish sources for each stage of this argument.
"Drugs need to be made available to the needy": Providing medicines to sick individual is a mitzvah (commandment). Jewish law states that we should not earn money for carrying out the mitzvot of the Torah (though in general we do not need to incur a loss where the mitzvah is to benefit someone else). For this reason, Jewish law stipulates that it is forbidden to sell vital medicines for unreasonable sums. (1)
The Talmud tells a story of a Roman matron who knew of an effective remedy for a serious disease and tried to keep it secret. The sage Rebbe Yochanan tricked her into disclosing the remedy and made it public; the grave transgression of misleading others had to be put aside in favor of making this vital knowledge available to the public. (2)
"It is unreasonable to place the entire burden on drug companies": Just as it is a commandment to provide medicines to the sick, so it is a mitzvah to provide basic needs to the poor. The Torah tells us that we must provide the needy "enough for the needs which he lacks." Yet this doesn't mean that the first householder which the poor person visits must provide for all of his needs. Rather, writes Rabbi Moshe Isserles in his glosses to the Shulchan Arukh (Code of Jewish Law) "A private individual is not obligated to give the poor person enough for his needs; rather, he should make his distress known to the community" (Shulchan Arukh, Yoreh Deah, 250:1).
Furthermore, our law states that we should not sell medicines for "unreasonable" sums, yet given the vast sums needed for development and testing sometimes a great expense may be considered "reasonable" even though the production costs are minimal.
"Drug companies should play a leading role in the effort": As we just cited, Rabbi Moshe Isserles states that even though the first person faced with the needy individual need not provide all his needs, even so "he should make his distress known to the community". The drug company is the first one called upon to provide the needs of the sick; they have to take a leading responsibility in finding a way for the community as a whole to fulfill the mitzvah of providing medicine for all in a way which is practical and sustainable. Excessive largesse may lead to profits for drug manufacturers at the expense of appropriate availability of medicines; yet trying to squeeze the drug companies for low prices on existing medicines risks choking off incentives for development, thus killing the goose that lays the golden eggs.
A number of financing models fit this general schema. National health plans and HMO's finance drug purchases, but not blindly: they negotiate with the drug companies. As we wrote before, "Some drug companies have tried to form alliances with NGO's (non-governmental organizations) who are working to improve medical care for the needy." A worthy recent initiative is to create a global fund to finance certain AIDS medicines.
I do not believe that a Jewish ethical approach is inherently antagonistic to reasonable patent rights to drug companies. A basic commitment to equity requires society to work to provide adequate medical treatment to all who need it, but the same commitment requires that the cost burden also be equitably distributed.
SOURCES: (1) Shulchan Arukh, Yoreh Deah 336:3 (2) Yoma 84a.
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