Critical Reasoning

Pharmaceutical companies typically charge slightly inflated prices for drugs that have a large customer base and are heavily prescribed by doctors, in order to balance the losses such companies experience from producing “orphan” drugs—drugs that are used by so few patients that they can never be profitable. New federal regulations require pharmaceutical companies to limit the price they charge for any drug to cost plus a predetermined percentage profit.

If the statements above are true, which of the following must also be true?


A. New pharmaceutical technology has made advances possible; the drugs produced by such technology, however, are too expensive for all but the wealthiest patients.

B. If pharmaceutical companies do not find another source of income to balance the losses they experience in producing orphan drugs, such companies will no longer be able to produce those drugs without compromising overall profits.

C. Some patients already request generic pharmaceuticals, when they are available, because they are typically less expensive than name-brand pharmaceuticals.

D. If pharmaceutical companies reduce the costs of producing most drugs, they will be able to earn more profits despite the new law, and thus will be able to balance the losses they experience from the production of orphan drugs.

E. Even though charitable organizations that fund research into the rare diseases treated by orphan drugs provide some donations to offset the costs of the drugs, such donations are declining.



OA B

Source: Princeton Review