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It's unclear whether the demand would support a higher price I guess. Alternatively, another way of looking at this is perhaps that the distributors are seekin
by foota 3y ago
It's unclear whether the demand would support a higher price I guess.
Alternatively, another way of looking at this is perhaps that the distributors are seeking a profit, and so are demanding low prices from the manufacturer, meaning that high cost manufacturers go out of business, reducing supply. However, this may be inefficient, in that demand may exist at higher prices, that could support more manufacturers if not for the distributor.
- Terr_ 3y agoHm, so in other words perhaps there's a distributor/middleman layer without enough competition, one whose most-profitable situation comes from focusing on high-margin drugs.
- lsaferite 3y agoSounds like it's a lot of things, but one thing mentioned in the article is pricing pressure from plan administrators. Large plans have outsized influence on pricing. Mix that with unscrupulous manufactures that cut corners to lower costs and you have a mess. Those bad manufactures can agree to go lower than legit manufactures and they then let the plan administrators force pricing lower for everyone. At some point the legit manufacturers are priced out, leaving only the bad ones. Then when a bad one implodes, the market isn't there anymore. By this point plan administrators have anchored pricing too low and are likely going to be slow to adjust (if they adjust at all). NB: I'm not involved in the medical field or in economics, so take my statements as what they are, conjecture.