Scenario: Another big issue in business today is the about the ethics of pricing

Question

Scenario:

Another big issue in business today is the about the ethics of pricing. One aspect of pricing which is discussed and is very significant with regard to drug pricing, is the impact of pricing on customer access. Briefly stated, if the price is too high, some customers may be unable to afford a drug even if it is critical to their survival. Examples would be certain types of treatments for cancer and human immunodeficiency virus (HIV). Do a brief analysis of the issue of fair pricing of such drugs, using (a) concepts from the readings to date, and (b) any ideas or information you might have relative to any aspect of the issue.

Question:

What policy options do you think might be offered with regard to how to address the problem?

Explanation / Answer

There is a need for the government to regulate the policies that involve pricing of sensitive drugs that are required by the general population and represent the inelastic nature of demand. Such product will always be required by the population as it is a necessity and therefore, unfair pricing will cause them to not be able to purchase it. Policies need to be set in place which will allow the companies to raise the prices of the drugs only to a certain extent and there will be no monopoly given to any one company or party. This will also allow the government to stop the companies from. Regulating the price of the drug by allowing them to form a cartel which will then be unofficially regulating the prices according to their will.

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