The reason for this has to do with the nature of price. We take price as a signal for a lot of things but in something that isn't a commodity like oil or coal we assume that changes in price reflect a difference in quality. This is the same reason why Ben Affleck movies cost just as much as movies you might be interested in seeing. If you saw that movie was charging 1.50 and the rest of the movies are charging 7.00 you would just know that you are in for trouble if you go the cheaper route.
The generic drug's price is lower because the cost manufacturing is so little and of course they have a slight (or perhaps large) credibility gap due to their lack of marketing. It's also a market with no real barriers to entry due to the expired patent. The brand name price is higher because they set their price based on the idea that while they are selling fewer they will make more money because they are making a statement about their quality. They go for the market that either has a lot of money and doesn't want to fool around with a generic brand or is pretty stupid and think that they don't want to fool around with a generic brand. A drug's inventor might eventually get out of the market for their drug if the rich and the ignorant are not in the market for the drug any longer.
The fact is that there are a lot of problems with the prescription drug supply in this country. Because of the high price and fixed demand a black market has been created for people who can't afford the high prices but still need it. This happens most often in thefts at the pharmacy itself or of the trucks delivering the drugs in the first place. I'll leave it to your imagination to decide how people cover their tracks in the first case and why the second case is probably the better things for consumers. So you might as well go with generic because chances are no one is going to tamper with it to make a quick buck on the black market.
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Date: 2006-01-06 04:29 pm (UTC)The generic drug's price is lower because the cost manufacturing is so little and of course they have a slight (or perhaps large) credibility gap due to their lack of marketing. It's also a market with no real barriers to entry due to the expired patent. The brand name price is higher because they set their price based on the idea that while they are selling fewer they will make more money because they are making a statement about their quality. They go for the market that either has a lot of money and doesn't want to fool around with a generic brand or is pretty stupid and think that they don't want to fool around with a generic brand. A drug's inventor might eventually get out of the market for their drug if the rich and the ignorant are not in the market for the drug any longer.
The fact is that there are a lot of problems with the prescription drug supply in this country. Because of the high price and fixed demand a black market has been created for people who can't afford the high prices but still need it. This happens most often in thefts at the pharmacy itself or of the trucks delivering the drugs in the first place. I'll leave it to your imagination to decide how people cover their tracks in the first case and why the second case is probably the better things for consumers. So you might as well go with generic because chances are no one is going to tamper with it to make a quick buck on the black market.