How does demand impact other policy-holders

Reference no: EM13214241

As more potentially life-saving, but expensive drugs come to market, patients and insurance companies have difficult decisions to make. While in theory people would pay anything to save their own life or that of a family member, the efficacy of some of these drugs is uncertain and some are not curative. For example, Genentech's drug Avastin is not marketed as a life-saving drug, but as a life-extending drug and is estimated to cost as much as $100,000 per year. Research Avastin on the web, and address the following: Who (free market, insurers, Government, drug companies) should determine how demand is met? Use economic theory to support your claim. Do you believe that the government has an obligation to set guidelines for who receive these drugs? If so, what should those guidelines be? Should the insurance industry be obligated to pay for Avastin treatments and if so, how does this impact other policy-holders? Why or why not?

Reference no: EM13214241

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