3 ms·
A similar thing is happening with generic chemotherapy drugs. Profit margins for generics are thin, so few companies manufacture them. When a supply issue ari
by Cieplak 15y ago
A similar thing is happening with generic chemotherapy drugs. Profit margins for generics are thin, so few companies manufacture them. When a supply issue arises, distributors stockpile the drug and charge hospitals one or two scales of magnitude of the generic price.
- cperciva 15y ago... which is a perfect example of why we need derivatives markets. If hospitals purchased drugs a year in advance of anticipated demand, they would pay a slight premium, but wouldn't be subject to squeezes like this.
- jcdreads 15y ago...unless Goldman stopped selling derivatives on chemotherapy drugs and instead began to stockpile a large fraction of the available chemotherapy drugs in warehouses in Detroit.
- Cieplak 15y agoYou are absolutely correct that futures or call options could ameliorate this issue. However, I think stockpiling cancer drugs is a market distortion, which might justify government intervention in the form of price ceilings for various generic drugs.