Index IntroductionContextWhy did unethical behavior occur?Ethical ModelsConclusionIntroductionThe year is 2007, you are at the pharmacy and you are purchasing a pack of two EpiPens. You take the package to the counter and pay just under a hundred dollars. Fast forward nine years to 2016, you buy the same two-pack of EpiPens but this time your total is close to six hundred dollars. This dramatic 600% price increase is more than just annual inflation, it is an act of unethical business practices. People with severe asthma and allergies rely on EpiPens in emergencies. The price increase on this life-saving device raises concerns: Is it financially sound to have such a large price increase, or is this an act of corporate greed and selfishness? Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay Mylan Incorporated is one of the world's leading generic and specialty pharmaceutical companies. Mylan and CEO, Heather Bresch, have offered their products in more than 165 countries and have been providing access to medicine for more than 50 years. In 2017, Mylan became the sole seller and distributor of EpiPens, giving them a monopoly on the market (Ginn & Waldman, 2016). On August 18, 2016, US Senator Bernie Saunders shared his opinion on Twitter regarding the outrageous price of EpiPens supplied by Mylan (see Appendix A). This tweet brought mass attention to the issue and was a starting point for several investigations into the controversial pricing of Mylan's EpiPen (Czarnecki, 2016). BackgroundMylan's actions can be described as a monopoly abusing its power. In addition to the 600% increase in the retail price of EpiPens, the company has also been accused of overcharging the US government for the device (Livni, 2017). They managed to pull off this scheme by classifying the product as “generic” rather than “branded.” This classification resulted in taxpayers paying approximately $1.27 billion more than they should, and Mylan only paying a 13% discount. Livni further explains in her article that the classification of an EpiPen, or any other drug, is a key factor in determining the amount of rebate the manufacturer will have to pay. In September 2016, the US federal health agency informed Mylan of this misclassification, but Mylan did not react, enforce and change (Bartz, 2016). After many thorough investigations, Mylan had agreed to pay a settlement of $465 million to the US Department of Justice. Bresch appeared at the Forbes Health Summit event where she willingly expressed her thoughts on the price increase: “We absolutely raised the price and we take full responsibility for that” (Weintraub, 2016). Along with this statement he attempted to justify the company's position and actions by insisting that the price increases were due to improvements made to the product and its production. When asked to further explain her arguments, she avoided answering the question directly (Weintraub, 2016). This scandal raises many questions about corporate social responsibility and business ethics. These questions will be discussed further throughout this analysis. Why did unethical behavior occur? Gareth Jones, author of Organizational Theory, Design and Change, suggests three reasons why unethical behavior occurs: personal ethics, self-interest and external pressure. The Mylan scandal may be closely related to the reasons behind personal interests andexternal pressures. Before explaining why these two theories are related, it is helpful to note an important factor revealed by CNN's Chris Isidore. He informed the public about the 2014 bonus plan that Mylan had in place. This plan was to focus the top five executives on aggressively increasing profits (Isidore, 2016). The goal was to increase Mylan's profits to six dollars a share by 2018. If that goal was achieved, the executives involved would be entitled to a bonus that would likely be worth millions. This information will help you understand the theories of self-interest and external pressure more clearly. Unethical behavior can occur due to self-interest when someone weighs the effects of their personal interests against the impact it will have on others. Jones suggests that people who have a career choice or money at stake are more likely to act unethically. In the case of Mylan, there was a large sum of money available to senior executives if they could achieve their profits of six dollars per share by 2018. Mylan executives were weighing their own self-interests against the impact that this had on consumers. they perform poorly in an economic sense and are also more likely to engage in unethical acts. This should not have been a factor in Mylan's situation because they have a monopoly on the EpiPen market and there are thousands of people throughout the United States who rely on this product. External pressure, as stated by Jones, is also a reason behind unethical behavior. This can occur when a reward system is put in place to encourage employees to behave in a certain way. Mylan's one-time bonus opportunity for top executives represents a reward that pushed the company to act unethically in hopes of achieving its goal. It is also possible that industry competitors collaboratively increase prices to gain extra profits. Where Mylan has a monopoly on the EpiPen industry, this was a very easy action for them to pursue. These two theories analyze the potential reasons why the behavior occurred, but it is also critical to determine whether the actions were truly unethical. Models of Ethics Jones summarizes three models that provide guidelines for determining whether a decision is ethical or unethical: The utilitarian and moral rights and justice model. The utilitarian model is described as “a decision that produces the greatest good for the greatest number of people” (Jones, 2013). Mylan's decisions did not create the greatest benefit for the best people as they got greedy with the bonus incentive and did not consider the impact the increased cost increase would have on consumers. The moral rights model is “a decision that best maintains and protects the fundamental rights and privileges of those affected by it” (Jones, 2013). Mylan's decision to continue raising the price of EpiPens could have a significant impact on the health of customers with asthma or allergies who rely on this product but cannot afford it. The justice model is a “decision that distributes benefits and harms among interested parties in an equitable manner” (Jones, 2013). Technically, Mylan distributed its EpiPens fairly and equitably to consumers so that everyone paid the same amount. The unethical aspect of this was the price they charged. Ethical issues are often highly debatable and the interests of stakeholders can conflict. The book The Strategy and Tactics of Pricing: A Guide to Growing More Profitably, by Thomas Nagle, John Hogan, and Joseph Zale 2017..