Economics Case Study Academic Essay - Write My Academic Essay

I. Assignment Overview: This assignment is based on an article published
in The Economists’ Voice titled ‘Want More Value from Prescription
Drugs? We Need to Let Prices Rise and Fall’, by Dana P. Goldman, Adam
Leive and Darius Lakdawalla, in 2013. The article is already attached to
this assignment question. Please read the article carefully before attempting
this exercise. You will also need to draw on other resources available
through the library as well as external resources. Please note that you need
to provide clear references for your sources when citing research and data.

II. Learning Objectives: This assignment is designed to encourage
you to think about the application of concepts learned in this unit in a real
world scenario. This assignment, indeed, is interesting as it explains how
the existing economic theories become helpful to understand the pricing
strategies of cancer drugs. We hope that this assignment will expand the
horizon of your thoughts.

Questions: Answer all questions. Limit the total word count of
your assignment to less than 3,000 words. You are encouraged to provide
necessary graphs, figures and tables with data wherever possible, which are
not subject to word limit. Please be careful in implementing referencing
styles.
1. In your own words, summarise the article. What is the main message
of this article?
2. According to Authors, “Drug pricing is also a product of a hidebound
reimbursement system that does a poor job in letting prices adjust
to new information about value.”- in light of the article and based on
your own research, please explain why the authors suggest so. Can you
provide a justification for the existence of a reimbursement system in
life saving drug market? Does the hidebound reimbursement system
lead to market failure?
3. Suppose you are a CEO of a pharmaceutical company called ‘XYZ’.
After investing millions of dollar, your company comes up with a drug
that may cure all types of cancer. As a CEO, what pricing strategies
will you adopt to maximise profit? Suppose government is planning to
adopt price ceiling or price floor strategy. Do you think such strategy
may affect your R&D (ie Research and Development) for developing a
new drug? Explain.
4. We have Pharmaceutical Benefit Scheme (PBS) in Australia. Do you
think our pharmaceutical industry is highly beneficial because of PBS?
Explain.
5. Do you think that the global drug market is a competitive market?
Explain.