Understanding the argument -
Problem - Expenditure rose
Goal - Curb the increase in Expenditure
Plan - The Ministry of Health prohibited drug manufacturers from raising their product prices
Paradox - The demand didn't increase, but expenditure still grew substantially.
How can revenue still grow if the demand does not increase and the price of those drugs doesn't increase? It means the drug manufacturers found a loophole. What loophole? Take a weird example - say, Azithromycin, which is an antibiotic, is a prescription drug. Say it costs $100 to insurance. The government said don't increase the price for Azithromycin. So what did the drug manufacturer do - they created "Pzithromycin" with the same salt and launched it for $300. Govt. did not stop Pzithromycin; they stopped Azithromycin from pricing increase.
Option Elimination -
(A) After price increases were prohibited, drug manufacturers concentrated on producing new medications to replace existing products. Exactly.
...
Problem - Expenditure rose
Goal - Curb the increase in Expenditure
Plan - The Ministry of Health prohibited drug manufacturers from raising their product prices
Paradox - The demand didn't increase, but expenditure still grew substantially.
How can revenue still grow if the demand does not increase and the price of those drugs doesn't increase? It means the drug manufacturers found a loophole. What loophole? Take a weird example - say, Azithromycin, which is an antibiotic, is a prescription drug. Say it costs $100 to insurance. The government said don't increase the price for Azithromycin. So what did the drug manufacturer do - they created "Pzithromycin" with the same salt and launched it for $300. Govt. did not stop Pzithromycin; they stopped Azithromycin from pricing increase.
Option Elimination -
(A) After price increases were prohibited, drug manufacturers concentrated on producing new medications to replace existing products. Exactly.
...
Statistics : Posted by Raman109 • on 07 Aug 2009, 06:31 • Replies 24 • Views 51879
