If a medicine isn’t used very often usually only one manufacturer will continue making it. They then can set monopoly pricing. I also have a belief that there is some actual or implicit collusion where they are dividing the market for generic drugs into monopolies by strategically dropping out.
FDA rules make it expensive to start new production or enter from abroad, so a new manufacturer is in for as price war they will probably lose.
There are lots of super cheap prescription meds. Many for a penny a dose wholesale. They have robust competition but still make money at that price point, although some makers may be selling fraudulent drugs.
In theory, when the patent on a popular medication is over, new players should pull the price down to marginal cost. These days that is not happening for many products and I’d like to know why. Any economists know?
FDA rules make it expensive to start new production or enter from abroad, so a new manufacturer is in for as price war they will probably lose.
There are lots of super cheap prescription meds. Many for a penny a dose wholesale. They have robust competition but still make money at that price point, although some makers may be selling fraudulent drugs.
In theory, when the patent on a popular medication is over, new players should pull the price down to marginal cost. These days that is not happening for many products and I’d like to know why. Any economists know?