4 ms·
What an odd way to phrase this. The actual body of the article is a tad more clear. > Patented medicines will face a 100% tariff entering the US This is paid
by surgical_fire 7mo ago
What an odd way to phrase this. The actual body of the article is a tad more clear.
> Patented medicines will face a 100% tariff entering the US
This is paid those importing the medicines, and passed on to the consumers.
- graemep 7mo agoPatents give you monopoly pricing power and patented drugs have huge gross profit margins. Given that, while part of the price increase will be passed on to consumers sellers will also cut prices. To put it simply if they could charge higher prices without losing volume they already would because no one else can produce that drug so there is no competition to keep prices down.
- surgical_fire 7mo agoI think they will just pass the tariffs on and that will be it. Corporations are notoriously greedy.
- junofan 7mo agoYour positions are: 1. Corporations are greedy 2. Corporations will pass the tariff onto customers #1 would imply drug companies charge the maximum price the market will bear. If so, how will they accomplish #2?
- surgical_fire 7mo agoWhenever they have an excuse to increase prices, they do. Mostly because when the tariffs go away they can stick to the current price. Tariffs are perfect in that it is not even an excuse. Maybe they can throw in an extra for their pocket too.
- graemep 7mo agoWhich is why they are already charge the price that maximises their profits. If they charged more the increased profit per unit would be more than offset by lower sales. A good diagram of supply and demand with monopoly pricing power us the easiest way to explain this. I cannot find a good one online that shows the effect of tariffs though. In essence its worth losing some profit per unit to avoid losing too many sales.
- surgical_fire 7mo agoMedicines typically have inelastic demand, which is why it needs heavy government regulation. Look into what happened with Insulin prices in the US in the recent past for a lesson on that.
- graemep 7mo agoIf demand is inelastic why have they not raised prices already?