Case Scenario:
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. As a result of the above scenario please research Avastin on the web (here are is a link to get you started:
https://topics.nytimes.com/top/news/business/companies/genentech_inc/index.html),
and then answer the following questions based on the research discovered on Avastin:
Question 1: Who (free market, insurers, Government, drug companies) should determine how demand is met? Use economic theory to support your claim.
Question 2: Do you believe that the government has an obligation to set guidelines for who receive these drugs? If so, what should those guidelines be?
Question 3: 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?