To better understand what solutions can be proposed to curb the price inflation of the pharmaceutical drugs, we must first understand why these pharmaceutical companies have put the price inflation into effect. Recently, many pharmaceutical companies have increased their prices to help raise money for funding. These companies justify their price increase as funding for research to find ...
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... with, the federal government should intervene and monitor the usage of the excess profits. The federal government should put in place a policy that will allow the government to to see where the profits are going. With a policy that allows the government to monitor the profits of these pharmaceutical companies, they are able to intervene the actions of the the companies to ensure that the CEOs are not reaping large profits for personal gain.
With the price inflation of pharmaceutical drugs and the current state of the economic market for these pharmaceuticals drugs, many of the patients have a hard time affording the purchasing the drugs. The pharmaceutical market is quite different from the other economic markets. What allows these pharmaceutical companies to have drastic price inflation can be honed in on one fact: there is a lack of competition within the market.
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- The market players, which in this case are leading pharmaceutical companies, would normally buy supplies, such as active pharmaceutical ingredients (APIs), from major suppliers that form sub-sector of the chemical industry. These are provided on a contractual basis and most pharmaceutical companies face high switching costs if they decide to change suppliers. That is why a number of these companies decided to invest in chemical manufacturing and become partially self- sufficient. Another way in which these market players are able to reduce the supplier power is through purchasing their raw materials from multiple suppliers; since their laboratory equipment and chemical ingredients show littl... [tags: Pharmacology, Pharmaceutical industry]
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965 words (2.8 pages)
- On the other hand, generic drug companies and those who want access to affordable drugs view it differently, arguing that brand-name companies abuse the patent law in order to keep their profits high. Clearly, the debate all stems around innovation as it the main reason pharmaceutical companies are allowed to patent their drugs. Pharmaceutical companies are allowed to patent their drugs because it encourages further medical research without the fear of competition taking an idea. A patent ensures that any company who invents a drug has exclusive rights over the production and sale of the drug for a certain period of time.... [tags: Pharmacology, Pharmaceutical industry]
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1147 words (3.3 pages)
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1921 words (5.5 pages)
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