Quote:
Originally posted by Mmmm, Burger (C.J.)
[1] That, and the extensive regulation/demand subsidization.
[2] true, they do, but my guess is that's the exception not the rule, and, if you want, you can substitute the phrase "duopoly" or "oligopoly" for "monopoly" and nearly the same arguments apply. Price competition is not agressive in any of those circumstances.
[3] Sure, but that's not the point. The point is that the cos. are able to price discriminate. That suggests that arbitrage opportunities are hindered by something, here laws banning reimportation, or just hte practicality of it. Given low transport costs, drug prices would not be so different in different countries absent certain regulatory barriers, which are a market imperfection.
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[1] we are in agreement on regulation if you are speaking in terms of barriers to entry. Absolutely in agreement on subsidization.
[2] My guess is the opposite for most drugs, but I am not in the mood to google, so we can agree that we have different assumptions on this. As for the ologopoly, my feeling is that the presense of even a second player in the market (let alone multiple players), absent collusion, does place sufficient restrants on pricing power.
[3] I think we agree on this. I misread your prior post.
