Elasticity of Demand in Pharmaceuticals ( Avastin by Genentecht)

Elasticity of Demand in Pharmaceuticals ( Avastin by Genentecht (1

Elasticity of demand is simply how the changes in price of a good affects consumers responsiveness in the quantity demand for it . For a drug like Avastin , which is useful in the treatment of terminal disease such as cancers of the colon , retum , lung or breast its price would normally be high given the high demands for such drugs in managing and treating cancer (Drug Information Online 2009 . The cost of Avastin is as much as 100 ,000 a year , and it is one

of the most prominent drugs for treating cancer , as it prolongs life with some months (Kolata Pollack 2008

When patients are the one paying for the drug , given the high cost of the drug those who can afford it would be the affluent , and the number of demand would be low . Small percentage change in price in the drug will have little effect on its demand as the same number of demand would still be made , thus we say it would have a perfect inelastic demand . When Government is subsiding or demand for it would greatly increase , as thus who can 't afford it would now gain access to it . However , when private insurance is footing the bill for the drug , the number of users who be restricted as when government is paying for it . The number of policy holder in a private insurance firm would be a condition to restrict...