The short answer is they are not. I can’t imagine that more than 1% or 2% of the prescription volume fits this specific scenario of the patient choosing the branded product when the generic is available. As to why is that small segement choosing the branded product, it’s like I said, placebo effect perhaps, and financial assistance from the drug manufacturers (Lipitor card).
“Did I not say it boiled down to psychology?”
I never meant to imply the contrary
“I’m not clear why she would be “burned” for using this example.”
I got the impression, and I could be wrong here, that the OP thinks this a large problem, that patients are unknowingly getting scammed into paying outrageous prices when cheap alternatives are available. At one point he even mentioned gov. price controls and gov. launching educational campaigns. I’m trying to show that this premise is completely false and to write a paper about this specific subject would be pointless.
or am i not supposed to use milton friedman’s ideas when trying to learn about austrian economics?
Always use everyone’s ideas. This isn’t a cult that requires a blood pact so that you don’t listen to anyone else. The whole idea is to use logic.
yes but then wont you be less careful with money that is not yours?
Yes. It’s called moral hazard. When you have all the benefits with none of the losses.
also what does “specialize” mean?
To me, it seemed like you were saying that it would be best if everyone made everything for himself. Hence, I argued that there is much more progress when people specialize in trades at which they are relatively good instead of making everything themselves. That is the idea of comparative advantage - even if I am better at producing all items than you (use less resources), it stil benefits me to make only a subsection of those and have you make the others (that is the idea of comparative advantage and can also be demonstrated with a Production Possibilities Frontier, if you know what it is).
In fact, a very large chunk of the progress in mankind has come from the division of labor (specialization).
If this doesn’t ring a bell, I suggest you read a standard economics text like Principles ofEconomics by Mankiw to get an idea of what standard economics looks like (the micro is generally neoclassical while the macro is Keynesian, so you’ll want to go beyond that text and read some Austrian books afterwards, but you should at least know the general outlines of the mainstream story).