PJC_H2_ECONS_P1

Name: Centre No. / Index No.: / Class: Pioneer Junior College 2017 9757 / 01 / PJC Prelimi nary Examination / 2017 [Turn over] PIONEER JUNIOR COLLEGE, SINGAPORE JC2 Preliminary Examination 2017 Higher 2 ______________________________________________________________________________ ECONOMICS Paper 1 Additional Materials: Answer Paper 9757/01 14 September 2017 2 hour 15 minutes ____________________________________________________________________________ READ THESE INSTRUCTIONS FIRST Write your Centre number, index number and name 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 any diagrams, graphs or rough working. Do not use staples, paper clips, highlighters, glue or correction fluid. Answer all questions. At the end of the examination, fasten all your work securely together. Fasten your answers to each question SEPARATELY. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 7 printed pages and 3 blank pages. Pioneer Junior College Ministry of Education Blank Page

2 Pioneer Junior College 2017 9757 / 01 / PJC Prelimi nary Examination / 2017 [Turn over Answer all questions. Question 1 Pharmaceutical Industry and Healthcare Extract 1: Pharmaceutical industry gets high on fat profits Throw in widespread accusations of collusion and ov er-charging, and banking no doubt springs to mind. In fact, the industry described above is responsibl e for the development of medicines to save lives and alleviate suffering, not the generation of prof it for its own sake. Pharmaceutical companies have developed the vast majority of medicines known to humankind, but they have profited handsomely from doing so, and not always by legitimate means. Last year, US giant Pfizer, the world's largest dru g company by pharmaceutical revenue, made an eye-watering 42% profit margin. Five pharmaceutical companies also made a profit margin of 20% or more - Pfizer, Hoffmann-La Roche, AbbVie, GlaxoS mithKline (GSK) and Eli Lilly. Pfizer was also discussing a possible merger with Allergan, be st known for its Botox anti-wrinkle treatment. If the proposed merger goes through, the combination will be a monster among drug companies. As in other lines of business, such deals are a way to cut costs, gain market clout and achieve economies of scale. They also help firms expand to new markets. In pharmaceuticals the cost of developing new products is exceptionally high compa red with many other industries. So it is especially tempting for them to seek to extend their product range simply by buying another firm. Drug companies are also justifying the high prices they charge by arguing that their