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How much can a pharmaceutical company charge for medications?
By Rabbi Ariel Ovadia
Recently, lawmakers met on Capitol Hill to grill a highly unpopular CEO of the pharmaceutical firm Turing Inc. after the latter hiked the price of one of its drugs from $13 to a whopping $750. Outraged congressmen accused the executive of putting greed before human life by placing this vital drug virtually out-of-reach for so many patients. Although the executive repeatedly invoked the Fifth Amendment during the hearing, insisting on his right to remain silent, he has been claiming in various interviews that the move was necessary to turn a profit and to research and develop better drugs. In this article, I would like to turn to our sources to help us define what are the limits on charging for medical services or medications according to Halacha.
Charging for a Mitzvah
The Mishna in Bechorot[1] states that one who charges a fee to do a Mitzvah – such as testifying in Bet Din, sprinkling the waters of the Para Aduma and the like – invalidates his actions, as there is an obligation to provide Mitzvah services for free. The Gemara derives this from the verse[2]: “ראה לימדתי אתכם – מה אני בחינם אף אתם בחינם”, just like Moshe did not charge for teaching Torah, so too all future teachers of Torah – or providers of Mitzvah services – must do so for free. One may only collect the expenses they incurred, or be compensated for lost income resulting from the rendering of the service[3]. One may also charge for activities relating to the Mitzvah that are not the Mitzvah itself, such as for travel and other necessary arrangements[4].
It would follow, that a doctor may not charge for tending to his patients, as the Gemara in Bava Kama[5] based on the verse[6]: והשבותו, broadens the obligation to return a lost object to include returning one’s physical body as well (i.e. if someone is lost, or if their health is at risk). Accordingly, the Shulhan Aruch rules[7] that a doctor may not charge for his services only for the related effort (such as traveling to the patient etc.) or for what he could have been earning during that time.
Professional Doctors
The Nishmat Avraham[8] notes that such a method of calculation would be unfit for today’s day and age when a doctor’s sole source of income is the practice of medicine, and thus we cannot claim that the doctor is charging the patients for preventing him from earning money elsewhere. A similar question is raised by the Rishonim[9] with regards to today’s teachers and Dayanim, who are usually dedicated completely to their Mitvzah profession.
The Rosh[10] explains that Mitzvah professionals may charge as much as they need to free themselves from other endeavors and dedicate themselves solely to their practice. Similarly, the Nishmat Avraham writes, that doctors may charge whatever they feel would allow them to fully dedicate themselves to the practice of medicine for the benefit of the population. Rav Shlomo Zalman Auerbach זצ”לadds[11] that if the medical professional was offered jobs in research or paying hospitals and instead chose to tend to his practice, he may also charge on that count.
However, the Teshuva M’Ahava[12] stresses that there is still an obligation to tend to those patients who have no means for a price they can afford or even for free. If the only doctor in town is refusing to tend to those who cannot pay, the Bet Din has the executive authority to force him to do so, or else the city’s Tzeddaka fund must provide the funds for the treatment of the poor[13].
Liability for an Outrageous Bill
Although it is clear that one may not charge an exorbitant amount to tend to a patient, the Rishonim[14] discuss a case where a doctor demands a large sum and the patient agrees to pay. The Gemara in Yevamot[15] rules that one who demands a large sum from a fugitive to help him cross the river, may be later denied by the fugitive and paid only what is reasonable, because the acceptance of the price by the fugitive was clearly done only out of duress.
Nevertheless, the Ramban and most Rishonim[16] distinguish between this case and that of a doctor, even if the patient feared for his health. They reason that unlike crossing a river, which has a general market price-range, medical expertise tends to command a very high price (although inappropriately so, as we explained above), and therefore the acceptance of such a price is not seen in the eyes of Halacha is illegitimate[17].
Doctors vs. Drugs
However, this is only true with regards to medical expertise, but not with regards to medications. The Shulhan Aruch[18] rules one is not allowed to sell healing herbs for more than the appropriate amount – and even if he was promised an exorbitant amount for the medicine – the patient may rescind his offer after receiving the medication and pay only the proper market value. While there are various details to this Halacha, the reason for the distinction clearly stated in the Shulhan Aruch: medical expertise can fetch very high prices whereas herbs have a set market price.
Rav Yitzhak Hutner זצ”ל explains[19] this distinction by elaborating on how human wisdom is immeasurable. The judgement and understanding of a specific doctor cannot be measured-up against any other product or service and thus cannot be confined to a price tag.
Calculating the Price of an Exclusive Drug
We must now determine how to treat the case of an especially researched and developed drug that is exclusively produced by a specific pharmaceutical company. Although it is unlike a human doctor who can claim to have a matchless and near priceless perspective and insight, it nevertheless is a unique product with no market parallel, and was devised using the unique minds of researchers who invested considerable effort, money and thought into its creation. The company also has a lot of related efforts which involve the production, shipping, quality control and other aspects that go into producing an effective drug.
It would seem that one who committed to pay for the drug – even if it were an exorbitant amount – and was provided with the drug, must pay whatever he made up to pay, as in the case of the doctor. However, the company itself must calculate its price only to reflect the costs involved with researching, developing, producing and providing the drug and may mark up the cost to allow them to continue researching and developing more drugs as well as dedicating themselves to the research of medicine. It would seem that they may even charge a bit more to incentivize the research of medicine[20].
If there are patients who cannot afford to pay for the drug, those with executive capacity must find a way to provide it to them, and the patients’ communities would also have the obligation to raise funds to make the drug available to those who need it[21].
And the Best Doctor goes to…
I would like to conclude with the well-known Gemara in the end of Kiddushin[22] which states that the best of the doctors goes to Gehinam. There are many explanations for this baffling Gemara. One of Rashi’s explanations is quite a simple one: the good doctors do not generally tend to those who cannot afford their services. The Gemara in Taanit[23] relates that the great sage Abaye once learned that Abba ‘Umna – a doctor – had greater regard in Heaven than him. One of his sterling traits was that he would treat poor patients for free, implementing a special system that would not even cause them shame for not paying.
While a doctor or a pharmaceutical company is permitted to charge a carefully calculated fee, they must always remember that they are in a position in which people’s lives depend on their decisions.
Sources:
[1] כ”ט ע”א
[2] דברים ד’, ה’
[3] שם במשנה נותן לו שכרו כפועל בטל, וקי”ל כאביי דפועל בטל היינו מאותה מלאכה
[4] שם בגמ’ ל”ק כו’
[5] פ”א ע”ב
[6] דברים כ”ב, ב’
[7] יו”ד סי’ שלו ס”ב
[8] שם
[9] תוס’ כתובות ק”ה ע”א וברא”ש שם
[10] שם
[11] שם במכתב למחבר
[12] ח”ג יו”ד סי’ ת”ח
[13] ציץ אליעזר חי”ד סי’ כ”ז ס”ק ב’
[14] רמב”ן בתורת האדם ויבמות ק”ו ע”א, ושאר הראשונים שם
[15] ק”ו ע”א
[16] שם, חוץ מהריטב”א
[17] וכן פסק מרן ביו”ד סי’ שלו ס”ג והרמ”א חו”מ סי’ רס”ד ס”ז. ומשמע דרופא ממוצע שודאי אינו מוכר ומיוחד במינו אכן לא יוכל לדרוש יותר, אא”כ מתעקש החולה דוקא עליו דלא מכל א’ זוכה אדם להתרפאות. וע’ נשמת אברהם שהביא מהגר”י נויבירט זצ”ל שחקר על הך דינא דהתשובה מאהבה אם כופין לרופא שמתעקש החולה עליו דוקא. ולכאורה אם דרש הרופא שהתעקש עליו החולה סכומי עתק אפשר שצריך לשלם. וראיתי בקיצור שו”ע המלך ח’ יו”ד שהביא ש”ב הגר”ע בצרי שליט”א משם סבי המקובל הגר”י פתייא זצ”ל דלעולם ילך אדם אצל הרופא היותר גדול ומפורסם, דכל רופא יש לו שר רוחני בשמים כפי מעלתו בארץ המסייעו, וכן היה תמיד מייעץ לחולים שהיו צריכים ישועה
[18] שם
[19] פחד יצחק שבועות, מאמר ט”ז
[20] כדין התירו סופן משום תחילתן
[21] וע’ חו”מ סי’ רס”ד בעניין דברים שיש בהם משום חיי נפש שאסור להשתכר יותר מדאי, וכן בסעיף כו’ שיש איסור להפקיע שערים אם הוא היחיד שיש לו את אותו מוצר – ולכא’ הוא אפי’ אם הוא זה שהמציא אותו אך סוף סוף צריכים לו החולים
[22] פ”ב ע”א
[23] כ”א ע”ב