Question

1. Why do drug manufacturers charge different purchasers different prices for the same prescription drug?
2. What trade-off is involved in public policy that regulates lower drug prices to ease the burden on those with low incomes?
3. What is the difference between identifiable death and statistical death?
4. What are the expected long-term consequences of price controls on R&D investments, quality of life, mortality rates, and the cost of medical care? please answer all accordingly

Answer 1

1)Drug manufacturers charge different purchasers different prices for the same prescription drugs because manufacturer s offer discounts bon brand name drugs based on both volume and purchasers ability to influence market share by systematically favouring one brand name drug over another.Hospital,clinics and health maintenance organization that purchase drugs directly from manufacturers and influence the prescribing practices of doctors frequently pay less for the same product than retail pharmacies.

2)a)The regulation of drug markets is the extent to which it would reduce the rate of drug innovation and decrease number of new drugs in the market place.

b)Medicare should be allowed to negotiate with drug companies and decline to cover a drug if the manufacturer is recalcitrant.

c)If the government limits manufacturer's ability to recoup the costs of risky research and development including investment that fail to lead to market drugs ,they will simply reduce their investment.

3)Identifiable death are the actual people who are died whereas statistical death is the term which simply represent data from the study of death in the population.

4) The expected long term consequences of cost control on R & D investment can affect cost and quality by altering incentives for pharmaceutical firms to engage in R & D of new drugs .It can also affect cost and quality directly by affecting the prices and use of existing drugs .Introduction of new drug improve the quality of life ,mortality rate and cost of medical care.