Demand and Supply of America Medicine Market

In: Business and Management

Submitted By wawawa
Words 880
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Demand and Supply of America Medicine Market

Associated with the quality life that modern society people pursued, an excellent health care is always concerned no matter where people are. However, the medicine demand and supply are an indispensible part of the chain. So there is a medicine issue of demand and supply in America, which eventually has required US government intervention is of serious concern.

Initially, from the article, it is can be explored that the demand of vital drugs like generic drug that is used to treat cancer, where shortage reports seem most critical and total number for drug shortage reached 232 in 2011 (The Economist, 2011). The factor caused this firstly is because of limited production capacity. So, as the demand for this type of medicines increasing, production lines are stretched to limitation. As a result, the shortage is caused while price goes up too.

Another factor for America medicine shortage is the consequence of long run excessive production. The medicine firms are willing to produce more drugs in order to maximize profits. However, the pressure on production causes a severe drawback on medicine’s quality. The bacterial or fungal contamination will result in large proportion of rejects and lowering real quantity that can be traded to the medical market. Thus, the whole industry has to depend on a handful of manufacturers who are keeping hygienic rules strictly but providing less quantity of drugs, which gives rise to lacking medicine supply again. In this case, a oligopoly market was formed, and US government requires manufacturers to hand in a notice before actually terminating its production six months in advance; it is also banned to sell any scarce medicine at a high price, otherwise, a possible prosecution is going to punish those lawbreakers or in the form of fine. This measure might have an impact on the medicine…...

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