Why pharmaceutical prices in the USA is a thousand times more than the same drug sold in a developong country?
About 200 years ago, commercial developers were facing a problem. It
cost money to invent something new, but once you invented it it was
really cheap for a craftsman to take it apart and build it themselves.
Governments feared that new technology development would cease
altogether. Their solution was to grant a short-term monopoly on any new
invention, allowing inventors to reap all of the benefits of their
investments to make it profitable to improve them.
Once you have a monopoly, you gain access to a bunch of tools to make
money. Instead of charging about what it costs to make something, you
charge whatever price will get you the most profit by figuring out how
many people will buy at each price, multiplying that number by the
profit per unit at that price, then picking the most profitable price.
The American market is most profitable at the price they set in
America. In Bangladesh, though, the most profitable price is lower. So
they set different prices in different areas, arguing that otherwise
their most profitable move would be to charge American prices
everywhere, denying developing nations access at all. As that would be a
thing that would actually happen, governments agreed, granting discount
drugs to developing nations while improving the profit of drug
companies over all.
So, basically, the companies charge the ‘real’ price in developed
nations that they need to to make their research budgets work, then
charge a production-cost price in developing nations that wouldn’t be
able to access the drug otherwise. Everyone wins – you get new drugs
being developed all the time (which you pay for), and Bangladesh gets
the drugs that they can barely afford to produce.
(CavemanCircus.com)
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