A big rise in the price of saving lives for cancer patients

According to this article, there is a big increase in the price of the medicine which is used to treat the cancer. This medicine is known as Mustargen, which “has been blended into an ointment by pharmacists and used as a topical treatment for a cancer called cutaneous T-cell lymphoma, a form of cancer that mainly affects the skin.”

Last August, Merck sold the rights of producing and marketing Mustargen and Consmegen, another cancer drug, to a six year old company, Ovation. As a result, an perfect monopolization was created. As there is only one company, Ovation, in this market, they can charge any price for their medicine. In addition, their total revenue won't change a lot because the demand curve for this life-saving medicine is close to perfect inelastic, as the patients will to pay any prices to save their lives.

However, since the Mustargen is covered by almost no insurance plan, the whole burden of the price rise has fallen on the patiens who relay on this medicine. “Don Schare of Saratoga, Calif., said he paid $1,260 last month for 200 grams of nitrogen mustard cream, about 10 times what he paid for his prior prescription.”

Finally, I have to say, if no one stands out to depress the price or make this medicine be covered by insurance plan, these patients will burn all of their money and leave nothing but their lives at their very last gasp.