Log in
HomeClass Notes1,200,000CA670,000

CRIM 2653 Lecture Notes - Lecture 8: Prescription Drug

6 views3 pages
School
York University
Department
Criminology
Course
CRIM 2653
Professor
Anita Lam

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

For the same volume of medicine in other countries, canada is closer to the top. Includes the whole sale markup, pharmacy markup, tax, etc. so the canadian price of a drug for 100 units could be 20-30% higher than other countries. The manufacturer price is not the price the payer pays. Some organizations are anti-industry and have perspective and data, their analysis shows canada may be paying more than oecd average. Generics in canada are more expensive than they are in the us, whereas here they may be 50% of the cost, but back in the day it was up at 75% Incentive from government that those younger than 65 have some form of coverage. For every dollar an employee makes, you can get taxed up to 40%. For every dollar the company contributes toward this coverage, there"s no tax paid on it. When quebec made health care benefits taxable in 1993, the employer provided health benefits dropped dramatically.

Get access

Grade+
$40 USD/m
Billed monthly
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers
Class+
$30 USD/m
Billed monthly
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
7 Verified Answers

Related Documents

ACT 3910 Lecture Notes - Lecture 4: Durable Medical Equipment, Managed Care, Pharmacy Technician
yellowcattle191
IRE240H1 Lecture Notes - Lecture 4: Registered Education Savings Plan, Quartile, Tax Deferral
raspberrybat42
COMMERCE 2BC3 Chapter Notes - Chapter 10: Socalled, Co-Insurance, Externality
coralporcupine574

Related Questions

Question 11 One potential remedy to the tragedy of the commons is to: never allow a single individual to consume more than one percent of the common resource. criminalize the usage of common resources. allow individuals to use a common resource as long as they receive some benefit from doing so. place a common resource under private ownership. 4 points Question 12 As a result of a positional externality: contestants have a tendency to invest in a series of mutually offsetting investments in performance enhancement. there is generally an underinvestment in performance enhancement. the market price of performance enhancement materials is too high. the quality of performance in competitive situations is lower than the socially optimal level. 4 points Question 13 Which of the following statements is true regarding health insurance? Economics shows that all health related procedures should be free to individuals because the health of an individual is priceless. Total economic surplus would be larger if individuals faced an incentive to only use services when the benefit exceeds their costs. Health maintenance organizations provide an incentive for doctors to prescribe expensive nonessential services. First dollar insurance coverage has likely had very little to do with rising healthcare expenditures since World War II. 4 points Question 14 A strategy that yields a higher payoff no matter what the other players in the game choose is known as a: prisoner's strategy. dominated strategy. dominant strategy. Nash strategy. 4 points Question 15 Based on the diagram below, if the costs of hospital care are constant at $200 per day, and the individual does not incur any cost for each day for hospital care, then: the individual will stay 7 days and there will be no loss in economic surplus. the individual will stay 3 days and there will be no loss in economic surplus. the individual will stay 7 days and there will be lost economic surplus. the individual will stay 3 days and there will be lost economic surplus. 4 points Question 16 Economic research by Manning and colleagues suggests that people with deductible health insurance policies: spend substantially less on health care and have substantially worse health outcomes compared to people with first-dollar insurance coverage. spend substantially more on health care and have substantially better health outcomes compared to people with first-dollar insurance coverage. spend basically the same amount on health care and have substantially worse health outcomes compared to people with first-dollar insurance coverage. spend substantially less on health care and have no measurable difference in health outcomes compared to people with first-dollar insurance coverage. 4 points Question 17 An efficient program for reducing pollution is one for which: all polluters incur the same total costs of abatement. all polluters pay the same amount in taxes to the government. all polluters have the same marginal costs of abatement. all polluters reduce their emissions by the same amount. 4 points Question 18 Given the information on pollution abatement costs of the two firms shown below, which of the following is an efficient combination of pollution reduction? Quantity of pollution abatement Firm A's MC of abatement Firm B's MC of abatement 1 $30 $25 2 $35 $30 3 $40 $35 4 $45 $40 Firm A reduces by 1 ton and Firm B reduces by 1 ton. Firm A reduces by 2 tons and Firm B reduces by 3 tons. Firm A reduces by 4 tons and Firm B reduces by 1 ton. Firm A reduces by 3 tons and Firm B reduces by 2 tons. 4 points Question 19 All of the following are characteristics of perfectly competitive markets except: there are a large number of firms. productive resources are mobile. all firms produce a differentiated product. buyers and sellers are well informed. 4 points Question 20 An advantage of the auction method to pollution abatement is that: it is very expensive to firms. regulators can achieve a desired abatement target without having detailed knowledge of the abatement technologies available to polluters. it requires all firms to reduce by exactly the same amount. it assures that eventually society will reach a level of zero pollution emissions. 4 points Question 21 There are 2 firms each emitting 200 tons of a pollutant. Firm A's abatement costs are constant at $20/ton, and Firm B's abatement costs are constant at $40/ton. The government's goal is to reduce pollution by half. If the government auctions 200 one ton permits to the highest bidder: Firm A will purchase all 200 permits. Firm B will purchase all 200 permits. each firm will buy 100 tons. there is no way to know who the highest bidder for any permit would equal. 4 points Question 22 As a result of economies of scale, as output expands: fixed costs are decreasing. average total costs are decreasing. marginal costs are increasing. total costs are decreasing. 4 points Question 23 Generally, when countries open their borders to free trade: both domestic producers and consumers of imported goods gain. both domestic producers and consumers of exported goods gain. domestic producers of imported goods and domestic consumers of exported goods gain. domestic producers of exported goods and domestic consumers of imported goods gain. 4 points Question 24 Which of the following is the best example of a tariff? South Korea bans imports of U.S. beef because of safety concerns. The U.S. requires toys imported from China to undergo testing for lead content. The U.S. imposes a tax on sugar imported from Brazil. The U.S. restricts the quantity of cars imported from Japan. 4 points Question 25 A means-tested program is a benefit program: in which benefits decline as a recipient's earned income increases. in which all individuals must undergo health screening to be eligible for benefits. in which all recipients exclusively receive benefits through in-kind transfers. that only affects the average income of a specific segment of the population. 4 points Save and Submit Click Save and Submit to save and submit. Click Save All Answers to save all answers.

Poor may suffer as India caps drug prices

India this week announced a policy to cap the prices of essential drugs, including ones for HIV and cancer, to make medicines more affordable for the poor. But observers of the pharmaceutical industry suggest that parts of the legislation may actually have the opposite effect — and a challenge has already been filed at the Supreme Court. Tapan Ray, director-general of the Organization of Pharmaceutical Producers of India in Mumbai, says that although industry will face some immediate losses, the updated policy is “prudent for India in the longer term”. Patient advocates argue that holes in the law will allow nimble pharmaceutical companies to sidestep the price restriction. They warn that the new policy could actually increase the price of medicines favoured by the poor.In India, drugs with the same underlying formulations are sold at a range of prices. GlaxoSmithKline, for example, sells an antibiotic combination under the brand name Augmentin for US$4.85 per 6 tablets. Competitors sell the same formulation for $1.20. The price difference matters in a country where 69% of the population earns less than $2 a day. Under the updated policy, Augmentin will become cheaper. But if its price comes down to only a few tens of rupees more than its lesser-known equivalent, say observers, people may opt to spend extra money for the recognizable brand. If this happens, other companies will lose the incentive to keep their prices lower than the price restriction.The policy also specifies the exact dosage of the drug that will come under price control. So pharmaceutical companies may switch their marketing practices to promote sales of alternate dosages exempt from regulation, predicts Gulhati. This practice is not unusual: Indian doctors routinely prescribe patients tablets that need to be split up to deliver the right dose. Patient advocates are wary from past experience. Studies have shown that doctors who are given information about certain drugs by pharmaceutical representatives tend to prescribe those drugs more frequently1, so the promotion of alternate versions of a drug may mean that the price-capped drug is no longer prescribed. A study published this year found that the most popular medicines prescribed for fungal infections in 2010 were not on the price-cap list2. Some price-controlled anti-fungal drugs had become unavailable in pharmacies as promotion of more expensive drugs led to a fall in demand for the cheaper option. In fact, only 6.5% of doctors polled even knew which medicines were controlled, suggesting that the price control had become largely irrelevant. “Is the new policy meant to control prices at all? This is all to mislead the people of India,” says Gulhati. Adapted from Nature.com (December, 2012) Answer the following questions:

a) Identify the type of restriction being proposed. Use the Extract to provide a justification for your choice.

Type of Restriction

Justification

b) Do you agree with the challenge filed in the Supreme Court? Use your knowledge of price restrictions to carefully advise the Government of India by examining the pros and cons of the policy.

Section B: Price restriction in the News

Pros of proposal

Cons of proposal

Advice to Government

Poor may suffer as India caps drug prices

India this week announced a policy to cap the prices of essential drugs, including ones for HIV and cancer, to make medicines more affordable for the poor. But observers of the pharmaceutical industry suggest that parts of the legislation may actually have the opposite effect and a challenge has already been filed at the Supreme Court.

Tapan Ray, director-general of the Organization of Pharmaceutical Producers of India in Mumbai, says that although the industry will face some immediate losses, the updated policy is prudent for India in the longer term. Patient advocates argue that holes in the law will allow nimble pharmaceutical companies to sidestep the price restriction. They warn that the new policy could actually increase the price of medicines favored by the poor.

In India, drugs with the same underlying formulations are sold at a range of prices. GlaxoSmithKline, for example, sells an antibiotic combination under the brand name Augmentin for US$4.85 per 6 tablets. Competitors sell the same formulation for $1.20. The price difference matters in a country where 69% of the population earns less than $2 a day. Under the updated policy, Augmentin will become cheaper. But if its price comes down to only a few tens of rupees more than its lesser-known equivalent, say, observers, people may opt to spend extra money for the recognizable brand. If this happens, other companies will lose the incentive to keep their prices lower than the price restriction.

The policy also specifies the exact dosage of the drug that will come under price control. So pharmaceutical companies may switch their marketing practices to promote sales of alternate dosages exempt from regulation, predicts Gulhati. This practice is not unusual: Indian doctors routinely prescribe patients tablets that need to be split up to deliver the right dose.

Patient advocates are wary of experience. Studies have shown that doctors who are given information about certain drugs by pharmaceutical representatives tend to prescribe those drugs more frequently, so the promotion of alternate versions of a drug may mean that the price-capped drug is no longer prescribed.

A study published this year found that the most popular medicines prescribed for fungal infections in 2010 were not on the price-cap list. Some price-controlled anti-fungal drugs had become unavailable in pharmacies as promotion of more expensive drugs led to a fall in demand for the cheaper option. In fact, only 6.5% of doctors polled even knew which medicines were controlled, suggesting that the price control had become largely irrelevant.

Is the new policy meant to control prices at all? This is all to mislead the people of India, says Gulhati.

Adapted from Nature.com (December 2012)

Answer the following questions:

a) Identify the type of restriction being proposed. Use the Extract to justify your choice. (5 marks)

b) Do you agree with the challenge filed in the Supreme Court? Use your knowledge of price restrictions to carefully advise the Government of India by examining the pros and cons of the policy. (15 marks)