There is no need to reverse-engineer the drug, as its under an expired patent—so all of the processes and techniques used are open and theoretically (if the patent office has done its job right) should be easy for a competitor to reproduce.
this is in fact one of the stated goals of the patent system: a limited monopoly in exchange for the advancement of public knowledge.
I was thinking less of the reverse-engineering costs and more of the hard production costs. Equipment, personnel, production time, etc. Those are non-trivial costs even if the complete formula and process is known.
right, so the drug that was getting sales of 600k per year was probably not worth the hassle of maintaining a compliant manufacturing line. does that not suggest a price rise was valid?
It's a time-arbitrage problem: there's no one else producing it (thus no free market) so they get to charge literally whatever they want since they're the only manufacturers, for as long as it takes a competitor to build another competing production line. This is reprehensible.
Once competition returns, the price drops again, and no one makes ludicrous profits anymore. But if the expected returns in competitive conditions are miniscule, there may not be sufficient incentive to produce a competitive market for this individual drug again.
this is in fact one of the stated goals of the patent system: a limited monopoly in exchange for the advancement of public knowledge.