First: I don't disagree with you about price gouging and the need for a solution. i spend time awake at night thinking about it.
Considering COGS in Biologics drugs pricing is a logical fallacy. The $10 is irrelevant. You have to amortize in all the time, and expenses required to establish a sterile fill and finish facility, or the required capacity of a new product in an existing facility. A reasonable accountant would also probably throw in some of expense for the patent lawyers generic firms have in legion, or R&D pharma has. Maintain a large amount of sterile injectable manufacturing capacity at "drop-of-the-hat" availability to absorb/profit from such market fluctions at low pricing? Not a business model anybody would fund, or would keep someone employed in pharma.
Does that justify the new price, probably not. Does it make a $300 pen a great business plan? Probably not.
Hopefully that changes as the parasitic business models of the Valeants and Skrelli's of the world are receive due scrutiny.
Your point about R&D is valid, but in this case epi was first synthesized in 1895 and the R&D cost has long since been amortized and the IP is in the public domain.
I agree it's a good business plan as a solo participant in the market, but as a second or third entrant, probably less so-- depending on IP around the formulation and delivery method.
With the number of company with discontinued products in the Orange book, i suspect there is some economic burden.
> i'm not sure why the price will stand in the long term.
I think the system we have leads to partial collusion, since all firms have an incentive to keep prices high and share the market two or three ways. If there were 30 or 40 pharma companies competing it would be a different story.
Considering COGS in Biologics drugs pricing is a logical fallacy. The $10 is irrelevant. You have to amortize in all the time, and expenses required to establish a sterile fill and finish facility, or the required capacity of a new product in an existing facility. A reasonable accountant would also probably throw in some of expense for the patent lawyers generic firms have in legion, or R&D pharma has. Maintain a large amount of sterile injectable manufacturing capacity at "drop-of-the-hat" availability to absorb/profit from such market fluctions at low pricing? Not a business model anybody would fund, or would keep someone employed in pharma. Does that justify the new price, probably not. Does it make a $300 pen a great business plan? Probably not. Hopefully that changes as the parasitic business models of the Valeants and Skrelli's of the world are receive due scrutiny.