Thursday, August 6, 2020

Controlling exhorbitant price of drugs in America

I am suggesting a method to control the exhorbitant prices of drugs and medical equipments in America. The idea is setting a maximum price on the drugs and medical equipments based on certain parameters and two pricing periods.

1st period : Recovery period

In this period, the drug companies and medical equipments manufacturers can set any price, till they recover two times the R&D they spent on finding drugs and medical equipments.

2nd period : Patent period

In this period, the price of the drugs and medical equipments should be based on four parameters.

1. Total money the company spends on all R&D, the more money you spend on R&D, the more points you gain, not withstanding breakthroughs you made or not.

2. The number of breakthroughs, the company has gained by spending on R&D, the more drugs you find, more the points.

3. The price the company spent on R&D on that particular drug or Medical equipment. More money spent, more points

4. The amount that is required to produce the drug. More amount to produce, more points.

Based on these parameters, we can set the maximum price, a company can sell their drugs and medical equipments. Government won't interfere in the number of pills you sell. It's just the points that will determine the maximum price of a single pill or a medical equipment.

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