» » The price matters a lot. Initially Intercytex will have a monopoly with
» » millions and millions of bald men wanting this treatment. Basic supply
» » demand economics will mean that the price will be sky high and out of
» » for the middle class.
» I disagree that it is necessarily true HM will be extremely expensive. I
» think they will try to make it as affordable as possible while still
» ensuring themselves a nice profit. If I had the monopoly on a product that
» tens of millions of consumers want and I could produce inexpensively, I
» wouldn’t charge so much for it that the vast majority of those millions of
» consumers couldn’t afford it. By doing so I would LOSE a lot more potential
» money than the rich people could possibly make up for by paying a
» ridiculous sum for my product. I would rather have fifty million people
» give me $5000 than ten thousand people give my $50,000.
» When competition comes, the market will drive prices down. But, even
» without competition a service provider must price their service so as to
» attract as many dollars as possible. That doesn’t always mean charging a
» ridiculously high price.
The flaw with this type of thinking is that you will not have the ability to service 50 million people right out of the gate. You can only service how much the initial infrastructure can manage. And if the supply is low, and the demand is high, the price will be very high.
If I had a business, and a monopoly at that, and I could only service 10,000 people a year to start off with (because that’s all my infrastructure would allow initially), and the line was 50 million people long, would I accept the 10,000 people willing to pay $100,000? Or would I feel like a generous guy and just charge 10,000 random people $10,000? Which would make me more money?
Only when the infrastructure expands to accommodate the demand will the price start dropping (or competition from another vendor). But it will drop, probably to the price range you are talking about. But without the infrastructure to handle the demand, they would be losing money by charging lower prices (if they are a monopoly. Competition obviously changes the equation). Only in the long term when supply is built out will charging less for more clients make financial sense.
As others have pointed out though, the initial release may not work that well. And if not, the price will not be high, because the demand will not be high. If it’s just slightly better than rogaine or proscar or a normal HT, who cares? Yeah, it’s progress, and that’s great and all. But it doesn’t really solve the problem yet. So the demand will not be there, even if there is short supply. So the price will not be that great.
If I can only go from a NW4 to a NW3, with no possibility of further improvement, that’s not worth $100,000. Perhaps it’s worth $5,000. But if I can get one treatment, and each treatment bumps me up just a 1/2 NW, and all it takes is for me to keep getting further treatments to eliminate my hairloss, then each treatment is suddenly worth $10,000 (or more), because the demand will then be much higher. And after 6-8 treatments ($60K-$80K), I have all my hair back. And if it does work this well, there has to be a way for me to ensure that I can get back in line without waiting. I don’t want to wait for them to open up new facilities and train more people. That could take years. And the only way to ensure that I have access to the limited supply available is $$$$.
Again, it all boils down to supply and demand.