Unit 2 → Subtopic 2.4
Should Insulin Cost This Much in the U.S.?
Insulin is a life-saving medication for millions of people with diabetes, yet its high price in the United States has sparked widespread debate over affordability and fairness in the healthcare market. Unlike many consumer goods, where buyers can switch between brands or forgo purchases when prices rise, insulin is a necessity for those who need it, raising the question: Is the demand for insulin inelastic? This project challenges students to engage in an in-class debate on whether insulin prices should be regulated or left to market forces, using the concept of price elasticity of demand to support their arguments.
Students will be divided into two teams. One team will argue that insulin should be price-regulated to ensure that all patients have access to affordable treatment. They will examine how inelastic demand allows pharmaceutical companies to raise prices without significantly reducing demand, often leading to financial hardship for consumers. The other team will argue that free-market pricing is necessary to encourage pharmaceutical companies to invest in research, innovation, and new treatments. They will explore the economic risks of government intervention, including potential shortages and reduced incentives for innovation.
As part of their preparation, students should research real-world case studies on insulin pricing, examining why the cost is significantly higher in the U.S. than in other countries. They should also explore alternative solutions, such as generic drug production, government subsidies, or price caps. During the debate, they will be expected to present data-driven arguments, counter opposing claims, and engage in critical discussion about the economic and ethical implications of healthcare pricing.
At the end of the debate, the class will reflect on whether insulin’s price is justified based on economic principles or if intervention is necessary to ensure equitable access. The goal of this project is to help students understand how price elasticity, market structure, and government intervention shape the cost of essential goods.
Recommended Procedure:
Research Insulin Pricing and Elasticity – Investigate how insulin prices have changed over time and whether demand remains inelastic despite price increases.
Develop Arguments for Both Sides – The regulation side should argue that inelastic demand makes price controls necessary, while the free-market side should defend pharmaceutical pricing as an incentive for innovation.
Analyze Government Intervention in Pricing – Examine case studies of countries with price regulations on essential medicines and their impact on healthcare markets.
Prepare for the Debate and Anticipate Counterarguments – Each team should gather data, prepare rebuttals, and use economic reasoning to strengthen their case.
Conduct the Debate and Reflect on the Outcomes – Engage in structured discussion, then evaluate whether market-based or regulated pricing is the best solution for essential medicines.
Suggested Sources:
Understanding Price Elasticity and Pharmaceuticals:
Investopedia: How Price Elasticity Affects Drug Prices – https://www.investopedia.com
Khan Academy: Elastic vs. Inelastic Demand – https://www.khanacademy.org
2. Case Studies on Insulin Pricing:
Harvard Business Review: Why Is Insulin So Expensive in the U.S.? – https://hbr.org
The New York Times: A Global Comparison of Insulin Prices – https://www.nytimes.com
3. Government Intervention and Healthcare Economics:
World Health Organization: How Countries Regulate Drug Prices – https://www.who.int
U.S. Congressional Budget Office: The Economics of Drug Pricing – https://www.cbo.gov
4. Debate Preparation and Argument Development:
Harvard Debate Council: Structuring Economic Debates – https://www.harvard.edu
Purdue OWL: How to Build a Strong Argument – https://owl.purdue.edu
Grading Rubric:
Total Points: __ /20
