> It's a common misconception that prices are even remotely related to costs. They're primarily based on what the market will bear. In a free market with low b

> It's a common misconception that prices are even remotely related to costs. They're primarily based on what the market will bear. In a free market with low barriers to entry and low transaction costs, prices are very much related to costs: the price of a thing is the same as the marginal cost of the last unit of a thing produced. This market is also an efficient market. You may note that the market for treatment of a particular condition has some pretty steep barriers to entry - patents and lots of research and FDA approvals. IT IS NOTHING LIKE AN EFFICIENT FREE MARKET. In this case, it sounds like they more or less have a monopoly on the treatment, and will charge whatever price maximizes their profit. (This may be multiple prices, if they can do effective price discrimination: charge more to customers able to pay more, less to customers able to pay less.) So yes. "Whatever price the market will bear" indeed. Postscript. To some extent this is the idea behind a patent on anything: Spend money doing research / design! Receive monopoly pricing power in return! Society gets to use it at will N years later!