3 ms·
If the deal is big enough, it’s absolutely on the table. These are “cost plus” contracts. See Walmart and the federal government for examples of consumers that
by aksss 3y ago
If the deal is big enough, it’s absolutely on the table. These are “cost plus” contracts. See Walmart and the federal government for examples of consumers that require these terms.
Now, the federal government, particularly with drugs pricing, turns a blind eye towards the suppliers just jacking up the purported cost. E.g. Pharma:“we want to make $100 per pill, it costs us $5 to produce”. Fed: “we demand cost + 10%, because the people”. Pharma:”Fine, let’s say it costs $90 to produce.” Fed:”Where do I sign?”
Whereas Walmart would say to somebody like Nabisco, “GFY; if you want your product on our shelves, you’ll open your books and give us audited cost + 10%”.