Turing pharmaceuticals priced a drug that used to cost customers $13.50 to $750. You saw the backlash they received. Customers wanted to know how can something that costs pennies to make are priced at $750. Politicians wanted to know what is the reason for the price increase.
The question of, why should we pay 1500X or even 10X for something seems a logical one everyone of us ask in every situation when pricing is out of line with known costs. But we do not ask this consistently do we?
Take the case of Apple. Just look at the $150 price bump we pay to get 128GB iPad over the 32GB one. Breakdown analysis estimate cost of flash and memory comes at $20 for 32GB and less than $30 for 128GB. Mind you these are estimates based on listed component prices and not the real price Apple pays to its suppliers. With the type of volume they generate and their incredible Operations machinery they likely get far lower prices. It should not surprised if suppliers sell these at or near cost to Apple hoping to make it in volume or from other customers.
Like the Turing’s drug we can safely state the 64GB flash costs apple $1-2 over 16GB and yet we gladly pay $100 more without complaining about price gouging. Nor do we see any politicos get in the game asking to, “Justify“.
See the context difference here? A life saving drug causes outrage but a flimsy want gets us to stand in line to pay willingly the higher price.
Where do you think is the difference? If you know write it on the back of 128GB iPad Pro and send to me.