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Definition of law
Requirements for human conduct applying to all persons within their jurisdiction
Factors courts commonly apply in reaching decisions
- Fundamental notions of fairness
- Custom or history involved
- Command of a political entity
- Best balance between conflicting societal interests
Reason To Regulate Drugs
- MARKET FAILURES
- Public goods
- Natural monopolies
- Information asymmetry
Public Goods are
•Necessary and beneficial commodities products that private entities will not supply because there is no incentive for a private entity to provide them.
•Examples: Orphan drugs, vaccines, parks, highways
Why do we consider Orphan drugs as public goods?
- Drugs that the number of patients who need them is so small that it is not commercially feasible.
- Government must step in to ensure their availability for those who need them.
Whey do we consider Vaccines as public goods?
- They benefit society as a whole by preventing epidemics, but because of acute reactions to them, they are
- viewed as too risky by many individuals.
- Prevention of epidermics is a public good and government must regulate by requiring vaccinations.
Whey do we consider Externality as public goods?
- - When the production or consumption
- of a good affects someone who does not fully consent to the effect
- - When the costs of the good are not fully incorporated in the price of the good
- Example: Indiscriminate use of antibiotics
Whey do we consider Monopoly as public goods?
• When the fixed costs (business expenses) of providing a good are high relative to the variable costs of producing the good.
• Example: Patents and market exclusivity for new drugs
Whey do we consider Information Asymmetry as public goods?
- • When the consumer is uniformed about the true value of a good
- •Consumers are unable to determine
- the medications value even after using them
- •Government regulations require the provision of information and input by educated professionals into decisions about drug use
- • Examples: Prescription only drugs;
- written consumer information for certain drugs
Limits of the law
- •Certain human relationships, in families or religious groups
- •De minimis violations (very minor violations)
- •Protecting individual freedoms while preventing harm to others.