hard · GMAT Verbal
A health-insurance analyst argues that a proposed cap limiting out-of-pocket costs for a class of diabetes medications to $35 per month will reduce the insurer's total annual spending on diabetes-related complications. The reasoning: patients who currently skip doses because of cost will take their medication as prescribed once the cap is in place, and consistent medication use is known to reduce diabetes complications requiring costly hospital treatment. The analyst projects the savings from fewer complications will exceed the insurer's added cost of subsidizing the capped price.
The analyst's savings projection depends on which of the following assumptions?
- Savings from newly adherent patients exceed the subsidy cost spread across all covered patients.
- All patients currently prescribed the affected diabetes medications are aware that the price cap has been proposed.
- The medications covered by the cap are the most commonly prescribed diabetes medications on the market.
- Pharmaceutical manufacturers will not raise the list price of the medications in response to the cap.
- Patients who already took their medication consistently before the cap will continue to do so afterward.
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