Common worm pill is found to be priced in the US 200 times its price in the UK. What can make a good be priced so differently in different prices? There are several factors that can cause such phenomenon. In general, there are two sides of factors: the supply side and the demand side.
The supply side factors are generally related to the costs. For example, if the pharmacy industry receives a huge amount of subsidies from the government, the cost of production is lowered by the subsidies and the industry would also be required by the government to provide cheaper products. Therefore, different levels of subsidies could differentiate price levels in different places. Moreover, the different structures of same industry could change the cost of production. Some countries could have different import and export policies and different economic outputs, these factors lead to firms in different countries have different levels of cost of productions, due to different prices of factors of productions.
The demand side factors are related to the purchase abilities of customers and their preferences. Some countries have more completed systems to cooperate with other industries. For example, a completed insurance system or a national health service system has a great influence on the medicine and pharmacy industries. A completed service system often could lower the costs for the customers. Sometimes the revenues do not directly come from their customers, instead their revenues from the service system, such as the government welfare system, the insurance companies. Therefore, pricing becomes less important and different from pricing in some countries which do not have such complete system. The necessity or the elasticity of demand could vary between countries due to different cultural background and consuming habits.
Overall, pricing definitely varies between countries; however, a difference like the common warm pill in the US and the UK is still abnormal and should be corrected.
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