Eli Lilly, one of the largest pharmaceutical companies in the world, announced in March 2023 that it would cap the out-of-pocket costs for insulin to $35 per month for patients with commercial insurance plans. This is huge news after years of price gouging from huge insulin companies.

Insulin is a critical medication for people with diabetes, a condition that affects over 34 million Americans, around 10.4% of the US population. Diabetics need insulin to live, thereby making insulin a very inelastic good.  These people are forced to buy the drug even if they set very high prices. 

The cost of insulin has skyrocketed in recent years, with some patients paying hundreds or even thousands of dollars per month for the medication. Eli Lilly along with Novo Nordisk and Sanofi are the three pharmaceutical companies that run the oligopoly for insulin. Due to the complex and expensive nature to manufacture insulin, the barrier to entry is incredibly high. After entering the market, insulin is a relatively cheap and easy drug to produce, however, due to an agreement between the insulin companies, the price of insulin is set larger than the marginal cost of producing insulin. This means insulin is priced way above the equilibrium and socially efficient value for a large majority of people.

The decision by Eli Lilly to cap the out-of-pocket cost for insulin to $35 is significant due to how long the drugmakers have set the price so high. First, it represents a significant reduction in the price of the medication for many patients, which will likely improve their ability to afford and access the medication. This is a positive development from a healthcare perspective, as insulin is a life-sustaining medication that should be accessible to all who need it. According t the law of demand, decreasing the price will cause a larger quantity of people who have been using insulin substitutes to make the switch.

A likely reason for why Eli Lilly decided to cap insulin prices is due to California threatening to produce their own insulin at a lower price for their own population. The richest and most populous state will not be affected by the barriers to entry and would easily be able to compete with pharmaceutical companies. California also contains nearly 13% of the entire US population, a huge hit to their profits if the drugmakers continued to price so much more than a competitor. 

By reducing the price of the medication, Eli Lilly may be able to continue competing with the new supplier in the market. With Elli Lily breaking the agreement for insulin pricing, Novo Nordisk and Sanofi have already followed by also reducing their insulin prices. 

Simon Chang

K-pop, or Korean pop music, has become an international phenomenon and a multi-billion-dollar industry. It has also become a strong passion of mine. With an assignment all about relating economics to my everyday life, there is no better topic to cover than the economics found in the typical activities of K-pop fans. 

To start, the costs of supporting my favorite K-pop artists can be quite steep.The explicit cost is the money spent on K-pop merchandise, ranging from CDs to posters to VIP concert tickets. The implicit cost is the time I could have spent on studying for midterms or doing homework. Even so, the benefits outweigh the costs in my opinion. Connecting with a community of like-minded individuals, feeling peaks of joy from seeing my favorite k-pop groups perform live, and making memories that last a lifetime are just a small fraction of the benefits I experience from funding this hobby. 

Additionally, trading is a common practice among K-pop fans. Upon purchasing a physical album, fans can receive random photocards of their favorite idols. However, there is no guarantee that one will get their favorite idol. So, fans will coordinate with others to trade photocards and satisfy everyone’s demand for their ideal card. In addition, the rarer a photocard is, the higher its demand is and resellers can proceed to market them at a much higher price. Some cards may even resell for as much as $500-800.

The economic activities in K-pop are limited to just the fans; K-pop artists also express economic concepts in their songs. “N.O.” by BTS is about the emotional toll of pursuing perfect grades in a country where education entirely defines one’s life course. When education comes to mind, most people think of the many benefits that come with it. This includes higher chances of employment and having access to higher-paying jobs. However, this song encourages the audience to explore the negative externalities of education, which is implied in the high rates of suicide, mental fatigue and illness impacting South Korea’s labour market. This raises the question of how much society is benefitting from the heavy emphasis on education.

Overall, K-pop is filled with various economic concepts, sometimes in ways that aren’t always obvious. Eonomics is more than just simply spending money on a good; it encompasses all the implications and greater societal impacts that ccme with that.

Kristeen Truong

Since the assignment said to consider how Econ has played a role in my life, I thought what better way to demonstrate economics and its role in my life than by analyzing its role in two of the major life decisions I've made in the past four years and the explicit and implicit costs I considered when making these decisions. For the sake of this assignment I’ve decided to analyze my choice of career and whether or not to attend grad school. Although my decisions were made considering a variety of factors, I will only be discussing the monetary explicit and implicit costs in this post. 

To start, I will analyze my decision to become an aerospace engineer. One of the benefits of this decision is after getting my bachelors, I can get a high salary job and potentially make more money in the long run than I would with a different career. A large explicit cost of this decision is that it requires that I go to college. The explicit cost is the money I spend on tuition and the supplies I use while getting my bachelors degree. An implicit cost of this decision is the money I would have received had I gotten a job right out of high school, as well as the money I would have earned from investing that money over the four years I spent getting my degree. 

The second decision I will look at is my decision to enter industry after my bachelors degree instead of continuing on with grad school. Some of the explicit costs of continuing on with grad school are the cost of tuition and housing while some of the explicit costs of going into industry are the cost of housing and other expenses I would incur when relocating closer to my new job. Some of the implicit costs of grad school are the salary I would earn working instead of continuing my education as well as any money I would have made investing the money I saved on tuition and earned from the job. Some implicit costs of going into industry are the salary I would have made working part time while attending grad school as well as any money I would have made interning or doing research during my time in grad school. 

While making all these major decisions, explicit and implicit costs were carefully considered and influenced my decision making. Although I understood the costs of my decisions before, I now have a better understanding of the costs, especially the implicit costs, that come along with any decision I make. 

Jolie White