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Politics : A US National Health Care System? -- Ignore unavailable to you. Want to Upgrade?

To: John Koligman who wrote (5504)	4/21/2008 11:09:52 AM
From: TimF	Read Replies (1) \| Respond to of 42652

I don't know enough about this specific drug to be sure, but if it was being used by very few people, less people than originally expected, and the income from those people wasn't enough to pay development costs, but a significant number of those people would continue to use the drug (because the insurance would still pay for it), and the higher price would recover the costs, than from a certain perspective the price increase makes sense. Without it this drug would be effectively subsidized by other drugs, or to put it another way the users of this drug would be subsidized by the users of other drugs. But I'm not sure that that scenario applies here. It seems the distributor was raising the price not the manufacturer/patent holder. If that's the case I'm not sure of the reason for the price increase. I don't have a lot of knowledge about these exclusive distribution deals. I suppose the justification for them is that without the extra profit from such deals, the pharmacies and distributors wouldn't carry a drug that almost no one uses, but that's just a guess. I don't know if that is the stated justification, or if its accurate whether or not its stated. I also don't know how much extra profit for the distributor is typical in these deals. In general I just don't know how this subset of the market operates. I can understand why the feds might give manufacturers exclusivity, but I'm not entirely sure why the manufactures would give the distributors exclusivity. Except in a few cases like Xyrem, which are controlled substances, the article doesn't really explain the reason for such deals.