Multiple choice

While prescription drugs have shown a steep and sustained increase in prices over the past few years, increase in price of over-the-counter drugs has rather been subdued.

Which of the following statements best explains the reason for the marked difference in the price trends of the two types of drugs?

  1. Over-the-counter drugs could enjoy the economy of scale.

  2. Over-the-counter drugs are more easily available.

  3. Sale of prescription drugs is brand dependent.

  4. Prescription drugs use some ingredients that need to be imported.

  5. What are prescription drugs today will become over-the-counter drugs tomorrow.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Prescription drugs being branded face lesser competition. OTC medications, on the other hand, face severe competition as a consumer can ask for any brand.

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