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PJC 2007 Prelim H2 P1 Qn Paper

PJC 2007 Prelim H2 P1 Qn Paper

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Published by Fang Wen Lim
PJC 2007
PJC 2007

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Published by: Fang Wen Lim on Aug 01, 2013
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 1Candidate Name: __________________________ CT Group: ______ Index no. : ______ 
Higher 2Paper 1Friday 14 SEP 2007 2 hours 15 mins
Additional materials: Answer paper
INSTRUCTIONS TO CANDIDATESDo not open this booklet until you are told to do so.
Write your name, CT group and index number in the spaces provided on all the answer papersprovided.Answer
questions.Begin Question 2 on a fresh sheet of paper. At the end of the examination, you will be requiredto
hand in your answers to Question 1 and Question 2 separately.
 The number of marks is given in brackets [ ] at the end of each question or part question. Youare reminded of the need for good English and clear presentation in your answers.
PIONEER JUNIOR COLLEGEJC 2 PRELIMINARY EXAMINATIONS 2007This question paper consists of 8 printed pages (inclusive of this page)
Question 1 The market for anti-HIV drugsExtract 1: AIDS: Branded and Generic anti-HIV drugs
Roche, the pharmaceutical giant, recently announced a price of $20,424 for a year's supply ofits anti-HIV drug Fuzeon in U.S. This was almost three times the price of the most expensiveAIDS drug. Roche claimed that Fuzeon is more expensive to produce than other anti-HIV drugs,claiming that it spent $600 million developing the drug. However, many HIV drugs that cost upto $15,000 a year in the U.S. can be made for less than $300 a year by generic manufacturersoverseas. These generic firms are allowed to enter the market and sell copies of the originaldrug when the pharmaceutical patent expires. As generic drugs contain exactly the same activechemical substances, these are considered as good substitutes to the original branded drugs.Meanwhile, as the AIDS pandemic is killing many millions of people in the prime of their livesand producing millions of orphans in Africa, public-health officials and grass-roots activists inAfrica are increasingly advocating that the government buy generic drugs, even if it means thatintellectual-property rights are violated. As a result, the five drug companies which supply anti-HIV drug, Glaxo Wellcome, Bristol-Myers Squibb Co., Merck & Co., Boehringer IngelheimGmbH of Germany and Roche Holding Ltd. of Switzerland, had offered to discount their pricesin many developing countries because they fear the developing countries will buy genericcopies of their drugs produced by generic drug producers such as Cipla in India and othercompanies in Thailand and Brazil. In recent months, Ghana, an African country, had begunexploring the option of doing just that. But a debate is now raging as to whether such actionswould violate the companies' patents and international intellectual property agreements.The pharmaceutical companies argue that without intellectual-property protection they wouldhave no incentive to invest the millions required to discover and develop new drugs. In addition,there is usually only one successful drug out of the many hundreds of rejected drugs. Ghanamay represent only a sliver of Glaxo's revenue, "but where do you draw the line?" asks MartinSutton, a Glaxo spokesman. In particular, Glaxo is believed to be worried that if a small countrysuch as Ghana violates patent protection, that could open a Pandora's box of violations inlarger markets, such as South Africa, Latin America and parts of southeast Asia where AIDS isalso raging.
Figure 1
Sources: World Street Journal, 1 Dec 00 and ACT up press release 13 Mar 03
Extract 2: Regulation of branded drugs
In the past year, critics have complained that prescription drugs are contributing to escalatinghealth care costs in the developed countries. Some also assail drug manufacturers, contendingthat drug prices are too high. They propose price controls as a way to lower drug prices. Pricecontrols have a consistent history: they don't work. Whether they apply to air fares, gasoline,telecommunications or medicines, they discourage innovation, create shortages and fail to keepprices in check. Further, they harm the poor by making whatever is controlled more difficult andmore expensive to obtain.However, according to leading prescription drug price and sales database information company,IMS Health, drug costs are rising primarily because of nonprice factors, including increasedvolume of prescriptions, record sales of new products and a changing mix of available products.Price increases have been relatively modest over the past 10 years.
Figure 2 Composition of Drug Costs
Another solution to the high price of drug is to allow price discrimination whereby theconsumers in the developed countries are made to pay a higher price so as to allow lowerprices in the developing countries. This is however limited by the increasing number of patientsbuying lower-cost drugs in other countries, a practice known in the pharmaceutical industry as"arbitrage" or "parallel trade."Sources: National Centre for Policy Analysis Policy Report No. 23 Oct 99 and Focus 16 Apr 04

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