The Pros And Cons Of Daraprim

My article was about a drug called Daraprim that has just seen huge increases in price. This drug is fairly specialized and so has very few alternatives. I believe that this is why the producers are able to increase the price to such height. In class we have looked at competitive markets, where most product is sold at or near equilibrium price, which is set by where the supply and demand curves intersect.
However, this drug isn’t being sold on a competitive market. Because it is a specialized drug, there are very few treatment alternatives created, and none of them are equivalent to Daraprim. This means that the company is able to charge much higher prices, because they have a unique and superior product. Consumers are forced to pay these higher
prices because they cannot use alternatives.
Another item that is discussed in the article is patents. Patents are issued by the government in order to encourage innovation. These protect businesses from having their product stolen, but it also allows companies to charge exorbitant prices. These patents run out after a certain amount of time, but in fields such as this where the market for the product is so small, other companies aren’t interested in joining, and if they are they are unable as is the case for this particular drug.