Supply & demand vs. price gouging

For a little economic lesson this morning, (don't worry I did take and pass both micro and macro economics in college but that was a long time ago and I don't remember much) one of the basic free market principles is supply and demand - how supply determines demand and hence sets pricing and more.

Medications are developed and manufactured by the companies who own the brand and are often sold for some giant price. As with any manufacturer, a pharmaceutical company will run into the same issues any other would - production issues, lack of raw materials, broken machinery, etc. These cause disruption in production and availability. Some production down time is allowed for - annual factory maintenance etc - but not all down time is  planned. This causes shortages - thus reducing supply.

When this happens in your grocery store, you buy a different brand or go with out. But when it is a life saving medication, its not that simple. New guidelines are being put in place so that manufacturers have to be more proactive in informing people about shortages and be better about preventing them. In the meantime, when there are drug shortages the scumbags (and I use the term loosely) who get the remaining amounts of the drugs and sell them to the hospitals at astronomical prices. Also known as price gouging.

As we live in a very reactive political world, there is legislation being introduced next week to make this price gouging by 'unscrupulous drug dealers' (a/k/a scumbags) into a federal crime. These people are forcing hospitals already in a belt tightening time, to greatly overpay for something that is needed to save lives. They get rich, a few people die, who cares? Right? WRONG! It should be a crime. And the money the hospitals are overpaying for these necessary drugs could be used to help other people as well.

This is the kind of thing that just ticks me off and makes me crazy. Its right up there with the 'losers' (and I use that term loosely) who claim they have cancer for the money and sympathy but are healthy. Grr!