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It depends on your definition of price gouging. You're defining price gouging as having the price reflect the marginal cost of the drug. I (and I think GP as we
by lukeschlather 7y ago
It depends on your definition of price gouging. You're defining price gouging as having the price reflect the marginal cost of the drug. I (and I think GP as well) would define price gouging a little more broadly and say simply that it's setting the price unreasonably high. Since marginal cost is not a reasonable pricing mechanism to achieve the desired goal, It's not a good basis for an argument that the price is reasonable and not gouging.
- troydavis 7y agoI think the term for what you're describing is "Supracompetitive pricing": https://en.wikipedia.org/wiki/Supracompetitive_pricing https://en.wikipedia.org/wiki/Supracompetitive_pricing (I'm not sure whether the evidence justifies that claim either, but the claim is a lot stronger than gouging)