RI 2022 H2 Promotion Examination - Paper 1

9570/01/Promo/Y5/2022 © RI 2022 [Turn over RAFFLES INSTITUTION 2022 YEAR 5 PROMOTION EXAMINATION Higher 2 ECONOMICS 9570/01 Paper 1 Case Study 21 September 2022 1 hour 15 minutes Additional Materials: Answer Paper READ THESE INSTRUCTIONS FIRST Write your name, index number and civics class on all the work you hand in. Write in dark blue or black pen on both sides of the paper. You may use a soft pencil for diagrams, graphs or rough working. Do not use paper clips, highlighters, glue or correction fluid. Answer all questions. The number of marks is given in brackets [ ] at the end of each question or part question. Attach this cover sheet to answers for Paper 1. Name: ______________________ Civics Class: ________________ Question Marks Economics Tutor: ____________ 1 /30 This document consists of 5 printed pages and 1 blank page.

2 BLANK PAGE

3 9570/01/Promo/Y5/2022 © RI 2022 [Turn over Question 1 The Pharmaceutical Industry Figure 1: US Pharmaceutical Industry Revenue (2010-2020) T able 1: Top Pharmaceutical Companies Globally by Revenue and R&D spending (2021) Company Revenue (billions, USD) R&D spending (millions, USD) Pfizer 81.3 13.8 Roche 68.1 13.3 AbbVie 56.1 7.08 Johnson & Johnson 52.1 11.9 Novartis 51.6 9.54 Merck 48.7 12.2 Source: Various Extract 1: The Risk in Suspending Patent Rules South Africa and India have petitioned the World Trade Organisation to suspend some intellectual property protections for Covid-19 drugs, vaccines and diagnostic technologies. In support of the effort, Doctors Without Borders began a social media campaign urging governments to "put lives over profits", warning of "pharma profiteering" and urging support for "#NoCovidMonopolies". If successful, the effort would jeopardise future medical innovation, making us more vulnerable to other diseases. Intellectual property rights, including patents, grant inventors a period of exclusivity to make and market their creations. By affording these rights to those who create intangible assets, such as musical compositions, software or drug formulas - people will invent more useful new things. Development of a new medicine is risky and costly. Consider that scientists have spent decades - and billions of dollars - working on Alzheimer's treatments, but still have little to show for it. The companies and investors who fund research shoulder so much risk because they have a shot at a reward. Once a patent expires, generic companies are free to produce

4 9570/01/Promo/Y5/2022 © RI 2022 [Turn over the same product. The prices of generic drugs are much lower than the prices of patented drugs – it has been suggested that for widely-used drugs, price falls can be as much as 95%. Moreover, the current situation is not a parallel to traditional abuse of monopoly power. Several major drug companies - including AstraZe