Question

Applying the law of demand, what happens to our health care system when a drug like Solvadi is released on the market?

Answer 1

Solvadi is a breakthrough drug used for the treatment of Hepatitis C.

Till now, Solvadi was not available freely in the market and its availability was restricted.

If Solvadi was released in the market, then its demand would increase drastically. Not only doctors or pharmacists demand them to keep it in their stock, but also consumers and patients would demand it on an individual level.

Also, supply would increase drastically.

This will increase demand and supply for Solvadi, shifting demand curve for it to the right along with supply curve, leading to an increase in the usage of Solvadi in the health care system and a fall in its price.