Pharma pricing model is often criticized. What are the two sides of the argument for why Pharma prices are set the way they are? What is Predatory Pricing? Price fixing?
Drug companies are promoting and pricing products beyond the reach of many people who ned them. They are increasing the prices at a drastic rate, much more than inflation, and often household can not afford the treatment. One example was that an AID's medication was increased from $13.50 per pill to $750 per pill when it only costs about $1 to make it.
The company perspective is that the high cost of drugs is justified due to the high expenses that these companies infer. In order to put a drug on the market, years of research and develop needs to occur which is extremely costly. In addition, even if a drug does make it to the market, about 70% of them never generate enough revenue to recover the cost of development.
Predatory pricing (also undercutting) is a risky and dubious pricing strategy where a product or service is set at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors. Theoretically if competitors or potential competitors cannot sustain equal or lower prices without losing money, they go out of business or choose not to enter the business. Price fixing is when all company's agree to keep a product around the same price.
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