Finance Ethics Case Questions
Finance Ethics Case Questions
ORDER A PLAGIARISM FREE PAPER NOW
hrome File Edit View History Bookmarks People Window Help 4 ş >) 100% Tue Oct 15 10:01:04 PM N Canvas | California State Unive x | Ethics Essay Chapter 6 Х WileyPLUS Х S View Questions | Studypool x + + → C edugen.wileyplus.com/edugen/student/mainfr.uni C WileyPLUS: MyWileyPLUS | Help Contact Us Log Out WileyPLUS Parrino, Fundamentals of Corporate Finance, 4e FINANCIAL MANAGEMENT (FIN 303) Home Read, Study & Practice Assignment Gradebook ORION Downloadable eTextbook Read, Study & Practice > Chapter 6. Discounted Cash Flows and Valua Select a Section Select a Study Objective 1 FULL SCREEN PRINTER VERSION BACK Ethics Case America’s Ailing Drug Prices CHAPTER RESOURCES ve Textbook Chapter Opener 6.1 Multiple Cash Flows 6.2 Level Cash Flows: Annuities and Perpetuities 6.3 Cash Flows That Grow at a Constant Rate 6.4 The Effective Annual Interest Rate Summary of Learning, Objectives Summary of Key. Equations Self-Study Problems Discussion Questions Questions and Problems Sample Test Problems Appendix: Deriving the Formula for the Present Value of an Ordinary Annuity Ethics Case: America’s Ailing Drug Prices ORION: Build your Proficiency. Narrated PowerPoints Solution Walkthrough Videos Learning By Doing, Interactive Tutorials Excel Resources Excel Walkthrough Videos Additional Resources In September 2016, Mylan CEO Heather Bresch appeared before the U.S. House Oversight Committee to address the controversial issue of rising prescription drug prices. Mylan was in the spotlight because of a dramatic 600 percent increase in the price of the EpiPen, a steroidal injector that treats severe and sometimes deadly allergic reactions. The rise in the cost of EpiPens was stunning. Priced at $100 for a two-pack in 2009, the same medication sold for over $600 by the fall of 2016. Members of the House of Representatives expressed their outrage over the surge in pricing for this important drug. Representative Elijah Cummings, from Maryland, accused the pharmaceutical maker of raising EpiPen prices “to get filthy rich at the expense of our constituents.” Mylan CEO Bresch countered this criticism claiming that the price increases were necessary to ensure that Mylan could continue to invest in the research and development (R&D) necessary for new drug discovery, as well as improvements to existing products including the EpiPen. The price increase for the EpiPen is hardly unusual in the U.S. drug market. Most drug makers added significant markups to the retail price of their compounds over the same time period. For example, AbbVie Inc. raised the price of the arthritis drug Humira more than 126 percent from 2011 to 2015, while Teva Pharmaceutical Industries Ltd. increased the price for its multiple sclerosis drug Copaxone by 118 percent over the same period. Data from National Health Statistics Group, summarized in the accompanying figure, illustrate that overall U.S. retail expenditures on prescription drugs grew steadily over the last 15 years. Between 2014 and 2015 prices increased 9.0 percent, to a total of $324.6 billion._ EPIPEN 2 PAK NOC 10500-30002 tasma ehlas யார் COURSE RESOURCES EPIPEN 2-PAK A2ma License Agreement | Privacy Policy. | 2000-2019 John Wiley & Sons, Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc. Version 4.24.15.6 5 OCT Dictionary A E46 | 15 a W Аа SSS sº Х mu To MU Chrome File Edit View History Bookmarks People Window Help 4 ş >) 100% Tue Oct 15 10:01:07 PM N Canvas | California State Unive x | Ethics Essay Chapter 6 Х WileyPLUS Х S View Questions | Studypool x + 个 > С edugen.wileyplus.com/edugen/student/mainfr.uni C WileyPLUS: MyWileyPLUS | Help Contact Us Log Out WileyPLUS Parrino, Fundamentals of Corporate Finance, 4e FINANCIAL MANAGEMENT (FIN 303) Home Read, Study & Practice Assignment Gradebook ORION Downloadable eTextbook Read, Study & Practice > Chapter 6. Discounted Cash Flows and Valua Select a Section Select a Study Objective 1 FULL SCREEN PRINTER VERSION BACK EPI NOC 10500-500.00 lements யார் EPIPEN 2-PAK (Epinephrine) Auto-Injectors 0.3 mg OPEN IMMEDIATELY SEPERTUFOV SECOND COUN CHAPTER RESOURCES ve Textbook Chapter Opener 6.1 Multiple Cash Flows 6.2 Level Cash Flows: Annuities and Perpetuities 6.3 Cash Flows That Grow at a Constant Rate 6.4 The Effective Annual Interest Rate Summary of Learning, Objectives Summary of Key. Equations Self-Study Problems Discussion Questions Questions and Problems Sample Test Problems Appendix: Deriving the Formula for the Present Value of an Ordinary Annuity Ethics Case: America’s Ailing Drug Prices ORION: Build your Proficiency. Narrated PowerPoints Solution Walkthrough Videos Learning By Doing, Interactive Tutorials Excel Resources Excel Walkthrough Videos Additional Resources Roel Smart/Getty Images Boosting the Bottom Line at Patients’ Expense? To be sure, price increases are an important way for drug company executives to increase profits and benefit their stockholders. Like most manufacturers, pharma giant Pfizer Inc. routinely raises prices for a large proportion of its offerings, including more than 133 of its products in 2015. Similarly, Merck & Co. raised its list prices by an average of 9.6 percent in 2016. In some cases, increases for just a single prescription can give a major boost to a company’s bottom line. For example, Pfizer increased the price of its popular painkiller Lyrica by 51.7 percent over a three- year period. Analyst projections suggest that Lyrica will generate close to $5 billion in annual sales for Pfizer through 2019.2 While the increasing cost of medications certainly hit patient’s pocketbooks, the consequences can be dire when sharp price increases imp WileyPLUS – COURSE RESOURCES lifesavina druan In ana hich nrofile 2015 nosa Turino Dhormonauticals handadhu than CEO Martin Shkreli cauired the drug Doronrim. FP License Agreement | Privacy Policy. | 2000-2019 John Wiley & Sons, Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc. JOGO -105-8699 SO ERU 5 OCT Dictionary 2 A E46 | 15 a W Аа SSS 2 TSG Х MU Chrome File Edit View History Bookmarks People Window Help 4 ş >) 100% Tue Oct 15 10:01:10 PM N Canvas | California State Unive x | Ethics Essay Chapter 6 Х WileyPLUS Х S View Questions | Studypool x + + → C edugen.wileyplus.com/edugen/student/mainfr.uni C WileyPLUS: MyWileyPLUS | Help Contact Us Log Out WileyPLUS Parrino, Fundamentals of Corporate Finance, 4e FINANCIAL MANAGEMENT (FIN 303) Home Read, Study & Practice Assignment Gradebook ORION Downloadable eTextbook Read, Study & Practice > Chapter 6. Discounted Cash Flows and Valua Select a Section Select a Study Objective 1 FULL SCREEN PRINTER VERSION A BACK CHAPTER RESOURCES ve Textbook Chapter Opener 6.1 Multiple Cash Flows 6.2 Level Cash Flows: Annuities and Perpetuities 6.3 Cash Flows That Grow at a Constant Rate 6.4 The Effective Annual Interest Rate Summary of Learning, Objectives Summary of Key. Equations Self-Study Problems Discussion Questions Questions and Problems Sample Test Problems Appendix: Deriving the Formula for the Present Value of an Ordinary Annuity Ethics Case: America’s Ailing Drug Prices ORION: Build your Proficiency. Narrated PowerPoints Solution Walkthrough Videos Learning By Doing, Interactive Tutorials Excel Resources Excel Walkthrough Videos Additional Resources Boosting the Bottom Line at Patients’ Expense? To be sure, price increases are an important way for drug company executives to increase profits and benefit their stockholders. Like most manufacturers, pharma giant Pfizer Inc. routinely raises prices for a large proportion of its offerings, including more than 133 of its products in 2015. Similarly, Merck & Co. raised its list prices by an average of 9.6 percent in 2016. In some cases, increases for just a single prescription can give a major boost to a company’s bottom line. For example, Pfizer increased the price of its popular painkiller Lyrica by 51.7 percent over a three- year period. Analyst projections suggest that Lyrica will generate close to $5 billion in annual sales for Pfizer through 2019.2 While the increasing cost of medications certainly hit patient’s pocketbooks, the consequences can be dire when sharp price increases impact lifesaving drugs. In one high-profile 2015 case, Turing Pharmaceuticals, headed by then CEO Martin Shkreli, acquired the drug Daraprim, a 62- yearold medicine used to treat a parasitic infection that can cause brain damage and death in infants and people with AIDS. Following the acquisition, Turing raised the price of Daraprim overnight from $13.50 to $750 a pill—a 5,000 percent increase! When asked by investors about the impact of the decision on the company’s profits, Shkreli cynically wrote, “I think it will be huge …. So 5,000 paying bottles at the new price is $375,000,000—- almost all of it is profit, and I think we will get three years of that or more. Should be a very handsome investment for all of us.” While not illegal, the price increase prompted public outrage and Shkreli was subpoenaed to appear before the U.S. House Oversight Committee to answer questions about the move. While Shkreli resigned as the CEO of Turing later in the year, the company continues to resist numerous calls to reduce the cost of the medication. U.S. Retail Prescription Drug Expenditures: 2000-2015 ($ Billions) $350 $300 – $250 COURSE RESOURCES License Agreement | Privacy Policy. | 2000-2019 John Wiley & Sons, Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc. 5 OCT Dictionary 2 A E46 | 15 a W Аа SSS sº Х mu To MU Chrome File Edit View History Bookmarks People Window Help 4 ş >) 100% Tue Oct 15 10:01:12 PM N Canvas | California State Unive x | Ethics Essay Chapter 6 Х WileyPLUS Х S View Questions | Studypool x + 个 > С edugen.wileyplus.com/edugen/student/mainfr.uni C WileyPLUS: MyWileyPLUS | Help Contact Us Log Out WileyPLUS Parrino, Fundamentals of Corporate Finance, 4e FINANCIAL MANAGEMENT (FIN 303) Home Read, Study & Practice Assignment Gradebook ORION Downloadable eTextbook Read, Study & Practice > Chapter 6. Discounted Cash Flows and Valua Select a Section Select a Study Objective 1 FULL SCREEN PRINTER VERSION BACK теаисе Спе COSL o Спе пеаcacОІІ. U.S. Retail Prescription Drug Expenditures: 2000-2015 ($ Billions) $350 $300 $250 $200 $150 CHAPTER RESOURCES ve Textbook Chapter Opener 6.1 Multiple Cash Flows 6.2 Level Cash Flows: Annuities and Perpetuities 6.3 Cash Flows That Grow at a Constant Rate 6.4 The Effective Annual Interest Rate Summary of Learning, Objectives Summary of Key. Equations Self-Study Problems Discussion Questions Questions and Problems Sample Test Problems Appendix: Deriving the Formula for the Present Value of an Ordinary Annuity Ethics Case: America’s Ailing Drug Prices ORION: Build your Proficiency. Narrated PowerPoints Solution Walkthrough Videos Learning By Doing, Interactive Tutorials Excel Resources Excel Walkthrough Videos Additional Resources $100 $50 $0 2004 2003 2002 2001 2000 2010 2009 2008 2015 2005 2006 2007 2011 2012 2013 2014 While the price increases associated with Daraprim are extreme, there is little doubt that the widespread increase in prescription drug prices is making health care increasingly unaffordable in the United States. Indeed, some health care advocates are now arguing that price increases actually translate into poorer health outcomes and dangerous medical conditions because some patients can no longer afford to take drugs at their prescribed dosage. WileyPLUS — The High Cost of Drug Development COURSE RESOURCES License Agreement | Privacy Policy. | 2000-2019 John Wiley & Sons, Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc. JOGODB120-10-5S699 SO ERU 5 OCT Dictionary A E46 | 15 a W Аа SSS 7 ISO Х mu To MU Chrome File Edit View History Bookmarks People Window Help 4 ş >) 100% Tue Oct 15 10:01:14 PM N Canvas | California State Unive x | Ethics Essay Chapter 6 Х WileyPLUS Х S View Questions | Studypool x + + → C edugen.wileyplus.com/edugen/student/mainfr.uni C WileyPLUS: MyWileyPLUS | Help Contact Us Log Out WileyPLUS Parrino, Fundamentals of Corporate Finance, 4e FINANCIAL MANAGEMENT (FIN 303) Home Read, Study & Practice Assignment Gradebook ORION Downloadable eTextbook Read, Study & Practice > Chapter 6. Discounted Cash Flows and Valua Select a Section Select a Study Objective 1 FULL SCREEN PRINTER VERSION A BACK CHAPTER RESOURCES ve Textbook Chapter Opener 6.1 Multiple Cash Flows 6.2 Level Cash Flows: Annuities and Perpetuities 6.3 Cash Flows That Grow at a Constant Rate 6.4 The Effective Annual Interest Rate Summary of Learning, Objectives Summary of Key. Equations Self-Study Problems Discussion Questions Questions and Problems Sample Test Problems Appendix: Deriving the Formula for the Present Value of an Ordinary Annuity Ethics Case: America’s Ailing Drug Prices ORION: Build your Proficiency. Narrated PowerPoints Solution Walkthrough Videos Learning By Doing, Interactive Tutorials Excel Resources Excel Walkthrough Videos Additional Resources The High Cost of Drug Development Bringing a new drug to market typically involves many years of very costly research, development, and testing by the pharmaceutical maker. Once a new drug is discovered and developed for human use, its safety and efficacy are evaluated by the U.S. Food and Drug Administration (FDA). As part of its evaluation, the FDA assesses the outcomes of three stages of clinical trials involving clinical researchers, doctors, and thousands of patients over several years. This process of discovery and testing can be very expensive with researchers estimating that the average R&D cost of developing a new FDA-approved medication was $2.6 billion (in 2013 dollars) over the last decade. Given these costs, it is little wonder that most pharmaceutical companies make enormous investments in R&D every year. Pfizer, for example, expensed over $7.5 billion in R&D in 2015 alone! Drug development and testing are also exceedingly time consuming and risky. On average, it takes a successful experimental drug 15 years to go from lab to patient. Unfortunately, the vast majority of drugs that are developed actually fail to ever receive FDA approval for use. In a recent industry study of clinical trials between 2006 and 2015, only 9.6 percent of all developmental drugs successfully made it through even the first stage of clinical trials. Of those that succeeded in the first phase, only 30.7 percent ended up making it through the second set of clinical trials. Given this very high development expense, the FDA grants a period of market exclusivity from 5 to 12 years when a new patented drug is approved for patient use. During the exclusivity period, no competing low-cost or generic version of the drug can be sold in the U.S. market. While exclusivity gives the company a veritable monopoly on the marketing and pricing of the drug, executives and regulators agree that it provides pharmaceutical companies with a critical economic incentive to develop new drugs. This incentive is important for the stockholders of drug companies because they have to finance R&D expenses and they bear the costs associated with the duration and risk of drug development. Innovation or Gaming the System While market exclusivity provides pharmaceutical companies with an important economic incentive to develop new drugs and improve existing medications, many of these same companies attempt to game the exclusivity rules through maneuvers commonly known as “hard switching’ “evergreening.” WileyPLUS COURSE RESOURCES and awit.hinc honnang when a manutenturor discontinue the colonfa dreimmediately hotora thaandofita evolucivitu narindand rani सार License Agreement | Privacy Policy. | 2000-2019 John Wiley & Sons, Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc. ROGEOL100-106 – SG995 ERU 5 OCT Dictionary 2 A E46 | 15 a W Аа SSS IS Х HI MU
Purchase answer to see full attachment
