An interesting debate is going on at the moment on Capitol Hill over soaring prices drug prices.
There are a great many accusations and defensive rhetoric being thrown about however none of it involves probably the main reason prices have gone up and up.
In my opinion that would be shareholders. Shareholders would scream if their dividends fell, the same shareholders who are probably represented by a great many politicians or really, ARE politicians.
The main segment who bear the brunt of this situation are lower income people; they do not have the luxury of disposable income so don’t have shares, the richer people who do have shares would have zero interest in seeing anything changed.
Wolves set to guard the sheep pen…how do you think this is going to end up?
2
Be part of the movement!
Welcome to the community for those who value free speech, evidence and civil discourse.Create your free account
3 comments
Feel free to reply to any comment by clicking the "Reply" button.Well - supply and demand. If people can't afford them, you won't sell them. If people can't afford them and they die, now you lost your customer base. Prices wouldn't be so much of an issue if we could get the FDA out of bed with big pharma. Also, actually hold the companies accountable for bad drugs and research, instead of slaps on the wrists for killing thousands, paying out a few million in fines after making billions in profits. Our government hasn't worked for the interests of the people for a very long time I'm afraid.
jondspen
Level 6
Feb 27, 2019
2
I know the Epipen went from around 50 dollars to over 250, just because, I imagine they believed the market would bear it.
People started going past the best by date because they could not afford the increase. Allergic reactions so severe that necessitate that sort of treatment I would think could be classified as a life and death product and yet prices went up.
I too wish that fines for this sort of behavior would be punitive!
I might suggest, as a more likely suspect, the calcifying effect that the FDA has on the pharmaceutical market. "Big pharma" acts in exactly the same way that we theorize a monopoly (or cartel) will act. Since other companies with share holders, in far less regulated/regulatable markets (e.g. television/computer/smart phone manufacturers, plastic surgery practices, or manufacturers of Tylenol, Ibuprofen, and toothpaste) don't act this way, then we must assume that whatever power allows for their monopolistic tendencies is at fault. Thus we turn to the corporatist policies of the FDA. Eliminate this blockage in the market, and it is my belief that this problem will rather quickly work itself out in the market process.
DocHolmes
Level 3
Feb 26, 2019
1
Is it possible that other products are manufactured by so many companies that a monopoly is not possible?
Although products you mention do come under disposable income more than life and death need so that might be a factor as well.
@Phoenix You are absolutely correct, this was my point. The FDA, within their guidance documentation and regulatory authority, overtly restrict access to the pharmaceutical market for certain therapies, treatments, and drugs; thereby creating de facto monopolies/cartels for exactly those products which prices have skyrocketed. The data is surprising correlative in this regard.
And yes, treatments which carry a "life or death" implication do have the potential for a considerably more inelastic demand curve, by nature, than say Tylenol. This being said, the nature of the demand curve, in this case, suggests that if any of these companies arbitrarily hiked prices, as was initially suggested, the producer surplus would be such that it would drive huge numbers of competitors into the market. Given that this has not occurred, the indication is that there is some regulatory/rent-seeking behavior which is distorting the market for these treatments - e.g. my initial comment on the calcifying nature of the FDA.
@DocHolmes I take your point, however, there was some information I saved somewhere about a drug going up in an unbelievable manner and if I remember correctly the condition needing treatment was not only life threatening but rare which might throw a wrench into this. I will try to find it.
Be part of the movement!
Welcome to the community for those who value free speech, evidence and civil discourse.Create your free account
Share this post
Categories
Slug does not evaluate or guarantee the accuracy of any content. Read full disclaimer.