Price Discrimination In Pharmaceutical Companies

Consumers set amounts and a budget they are willing or can afford to pay for goods and services. However since producers and manufacturers set exact prices, consumers may actually pay a different rate. Industries and companies want to see just how much consumers will pay, so they can collect as much as they can in revenue for their goods and services. “While these prices are set by the companies, price discrimination occur as many goods are similar, but sold at independent or other prices from the same provider”(Boundless, 2016). A lot of drug research and generation is done in the pharmaceutical field driving a massive cost for companies and creating their main justification for price discrimination. Companies that make drugs, declare higher amounts for countries that have more money and resources to buy their products, all driving higher cost in this market and varying measures of price elasticity. Countries like the United States are wealthier and are charged more for drugs. As this is done, consumers have to pay more for medications needed. This form of price discrimination is premium pricing. “Pharmaceutical companies use third degree price discrimination, giving discounts for volume per location and country”(Bhanji, 2012). …show more content…
They offer medications at lower or distinct costs to different consumers. The consumers can use co-pays and deductibles to assist in the high costs and purchase medications at different rates. Others that do not have insurance can get discounts from the manufacturers, doctors and medical companies to help lower costs. Overall offering affordable ways and rates to help consumers get the medications they need. References
Boundless. (2016). Examples of Price Discrimination. Retrieved from www.boundless.com
Bhanji, S. (2012). Price Discrimination in Pharmaceutical Companies: The Method to the “Madness”. Retrieved from