Prices for insulin have more than tripled in the US, over the last decade. In the US, more than 37 million people have diabetes. Patients with private insurance usually pay part of the price as a co-pay along with their insurance, while private insurance generally don't pay the whole amount due to discounts. However, those with lower incomes and uninsured, can end up paying several thousand dollars per year for their medication. As a result of the high prices, many patients are led to make life-or-death decisions over whether to buy their insulin or pay their other bills.

1. What type of market structure do we have here? What is the type of the market structure for health insurance companies?

2. What are the characteristics of these market structures?

3. So-called "generic" drugs are drugs made by competing companies after a company's patent has expired. Discuss the rationale for giving drug companies patents that allow them to charge monopoly prices for a period of time.

4. Can you think of any policies that the government may follow to combat the issue mentioned above? (Hint: can you find a recent policy that has been issued related to this topic?)