The paper 'Global Pricing Strategies for Pharmaceutical Product Launches' is a perfect example of a Macro and Microeconomics Assignment. Following the hiked prices of cancer drugs, various medical cancer expertise has sought to question the pricing issue, which is thought as unsustainable and unrealistic. This article looks at various reasons for the pricing strategies of cancer drugs (Goldman, Leive, and Lakdawalla, 2013 p1). In determining the value of cancer drugs the drug manufacturers have to rely on an approval and reimbursement system that interferes with the expected value of their drug product thus leaving them with no other option rather than recovering from their investment via high price set.
Some regulators, for instance, have put forth their threshold to ensure cost-effectiveness that not only brings forth a price floor but also a price ceiling, which if binding interferes with the market price. The concerned parties thought that these systems ought to be placed within a pricing flexibility measure that accommodates patients upon information availability of a new drug. Thus, matters of demand and supply of a new drug ought to be looked at to ensure the accessibility of new drugs.
Oncologists point out that cancer drug pricing comes with a package of how long or effective is the drug likely to support the person upon its use (the drug worth, the drug social value) were aggregates of concern towards reducing or increasing the prices. The article argues that the manufacturers of cancer drugs would appreciate a 10% return on their investment on a new drug, although this sounds reasonable, to aid in more research and development of new drugs, this would not be practical in either developed or developing country.
This is because, some cancer drugs, in reference to prolonging life are only realized upon consumption. Unfortunately, the regulators are not prepared to review the cost henceforth as such the initial price is set high ((Goldman, Leive and Lakdawalla, 2013 p40). Some readers may question the need to wait until such social value is realized prior to approval, however with cancer drugs justification of quality of life improvement may take more than a decade. While this may be feasible within research, the challenge is that there may be many cancer victims going to the soil while the effective therapeutic product was on trial.
Further, the longer the length of research the longer the expected start-up cost following the long-term investment.
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