In large the drug market is inflated, not deflated, because so many consumers don't pay anywhere close to sticker price out of pocket. Accordingly, one has to b

In large the drug market is inflated, not deflated, because so many consumers don't pay anywhere close to sticker price out of pocket. Accordingly, one has to be careful in ascribing typical free market motives to either supply or demand side actors. In this case, I think that with such price hikes, one would expect a further than observed decline in demand. We don't see this because so much of the consumer side is completely insensitive to price. Essentially more than half of the market spends as if they were multi-millionaires, and Turing is arbitraging this market inefficiency. I really think that typical free market mechanisms are completely overwhelmed in this case. Therefore it's impossible to say whether the long tail drugs that Turing is marketing would be considered under-priced in a free market. We can only say that in the current consumer-price-sensitivity short circuited market that the large pharma companies think that there are more profitable areas to put their energy than long tail drugs. And looking at it from their perspective, this seems fairly obvious. First off, these drugs represent a small part of the market. Also, even if they do covet Turing's margins, competing with Turing would diffuse the monopoly mechanism that enables Turing to secure these margins. The Nash equilibrium then would seem to be not to bother.