If you’re a company and need people to stop using your old widget and start buying more of your new widget, what’s the best way to do that?

If you’re a pharmaceutical company, you also need to keep manufacturing your old product (because hundreds of thousands of people still take it and so it still brings in a valuable revenue stream). In an ideal world, your new product (or medication) would be a cut above your old product — it would have fewer side effects and show much greater efficacy.

But in the real world, the bar is set much lower. You only have to show similar efficacy (not better). And while side effects often appear fewer in initial drug trials, they always seem to increase over time and with increased usage of the new drug.

So what’s a drug company to do?

Well, if you’re Shire, a large, popular maker of attention deficit disorder (ADHD) drugs, such as Adderall XR, you change demand for the older drug by increasing its price. And why not? The drug is going generic in April and you want users to change over to the new version of this drug, called Vyvanse, sooner rather than later.

The price increase for the older Adderall XR however is 20 percent higher than last year’s price, nearly triple the increase in the drug price of the newer Vyvanse. If you’re on Adderall XR and live in the U.S., chances are many people wouldn’t see this price increase because it’s paid for by your insurance company. But if you wonder why your insurance company might not cover it any more, this would be a good reason.

Read the full article: Shire hikes hyperactivity drug price more than expected

Dr. John Grohol is the CEO and founder of Psych Central. He is an author, researcher and expert in mental health online, and has been writing about online behavior, mental health and psychology issues -- as well as the intersection of technology and human behavior -- since 1992. Dr. Grohol sits on the editorial board of the journal Cyberpsychology, Behavior and Social Networking and is a founding board member and treasurer of the Society for Participatory Medicine.

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    Last reviewed: By John M. Grohol, Psy.D. on 11 Jan 2009
    Published on PsychCentral.com. All rights reserved.