Pharmaceutical Charges Strategy

 Essay on Pharmaceutical Prices Strategy

Pharmaceutical drug Pricing Technique

Ryan Ritchey

American Armed forces University

November 22, 2009

Pharmaceutical companies are in constant pricing competition and progressive " idea wars” so to speak. Differential prices, the specific price structuring and implementation, is definitely the solution to resolving the conflict between pharmaceutical drug patents. There are always several different brands of drugs that can be prescribed and even bought over-the-counter, but the decision of the consumer or medical professional is usually influenced by the price of the drug available. Drug companies must be based upon differential pricing so that they can defeat competition simply by undermining the potentially bigger prices that they can offer the client.

Brand name value responses to sell entry begins by let's assume that the brand name producer can be described as dominant firm that includes price replies of generics to its very own pricing decisions while the generic producers happen to be fringe businesses that take the brand name cost as given (Frank & Salkever, 1992). Pharmaceutical medication is often viewed as being inappropriately over priced and often makes it necessary for lower income buyers to choose universal brands as opposed to the branded medicines. The larger pharmaceutical drug manufacturers use massive amount involving in order to carry out research and development so that the drug will certainly meet the specifications set by Food and Drug Administration (FDA). Once a medication patent is approved and strikes the market, your competition can copy the drug for a cheap, therefore producing the common brands drastically cheaper compared to the originally branded brand.

A rational charges strategy manufactured by a pharmaceutic company would depend on require elasticity, which usually depends on various factors which include income and availability of substitute products going into the market. The us government is able to control the drug industry to a certain extent by negotiating on behalf of the consumers, to be able to offer a...

References: Frank, Rich G., В & В Salkever, David S.. В (1992). Pricing, Obvious Loss and the Market for

Pharmaceuticals. В Southern Economic Journal, В 59(2), В 165. В Recovered October 28, 2009, coming from ABI/INFORM Global. (Document ID: В 801714).

Henry, David, В & В Lexchin, Joel. В (2002). The pharmaceutical market as a drugs

provider. В The Lancet, В 360(9345), В 1590-5. В Retrieved October 27, 2009, from Study Library. (Document ID: В 244175561).

Neeraj Sood, Han de Vries, Italo Gutierrez, Darius D. Lakdawalla, and Dana G. Goldman.

The result of Control on Pharmaceutic Revenues: Experience In Nineteen Countries. Overall health Affairs, January/February 2009; 28(1): w125-w137.

Scherer, F. M. Price Handles and Global Pharmaceutical Improvement. Health Affairs,

January/February 2009; 28(1): w161-w164.

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