arket power is that, for products that are therapeutically homogeneous, they are able to charge higher prices than those charged by smaller forms.3 Ethical drugs are unique commodities in that the consumer has no choice what he is getting. He is literally under doctor’s orders. The doctor himself is therefore an all- powerful middleman.4 This puts the consumer in a bind. They have no sovereignty. They are restricted to what the physician has specified and prescribed, even though there may be other drugs with identical therapeutic properties. Also, if the physician has identified the manufacturer, either explicitly or implicitly, by the use of a brand name unique to the firm, the consumers’ latitude is further restricted to the specified firm by state laws on substitution. The consumer does not have the usual option, available to him in other markets, of buying close substitution. Also, they do not have a choice at all of not using the prescription if he or she needs the drug in order to stay in good health (Walker 25). The doctor is generally not well informed about the price of drugs and thinks that the patient would derive no significant economic benefit from exercising the option of selecting the firm. The doctor’s immediate source of information in a prescribing situation is The Physician’s Desk Reference, which is conveniently prepared and financed mainly by larger firms (The small firms, which sell drugs under generic names, are not represented in this manual). There is no mention of drug prices in this book. Given the scenario in which a person did not necessarily need the drug and choose not to get it, then the money that they have spent to see the doctor is a waste without the prescription.(Walker 29) The family doctor does not see these prices as being bad. He believes, despite criticism, that the drug industry as a whole does an enormous service to medicine. The research departments in the ...
