Drug prices are too low. Wait. What? That can't be right…
Some experts are telling the New York Times, yes, drug prices are too low. In an article about drug shortages in hospitals across the world, these experts point the finger at the low cost of certain medicines.
In fact, a report from the World Health Organization (WHO) said that prices that go too low might drive some medicines from the market entirely.
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Drug makers just can't make enough money to justify producing certain drugs, particularly generic medications that are not always in high demand. The fluctuations in demand and the low price mean that many manufacturers give up on the drug.
"Medicines can be too cheap," Hans Hogerzeil, a former director for essential medicines at the WHO, told the New York Times. "For a viable market model you need at least three and preferably five different manufacturers."
The phenomenon appears to be a greater problem abroad, but according to the American Society of Health-System Pharmacists, there are currently 155 pharmaceutical products that are not plentiful enough to satisfy demand from U.S. customers.
Ironically, as policymakers and politician demand action in response to the high cost of some drugs, others are suggesting laws that ensure the viability of drug makers by setting a floor on the price of some drugs or otherwise cooperating with drug companies to make sure the public is getting the drugs it needs.
Sounds good to Big Pharma.
"Companies don't like stock-outs either, so it is in everyone's interest to find a way forward," said Brendan Shaw, assistant director general at the International Federation of Pharmaceutical Manufacturers and Associations.
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