In an extreme case, an older drug generic might drastically increase in price when there’s a high demand for a drug but only one generic competitor. You may have heard the infamous story of Daraprim and Martin Shkreli. This is emblematic of “price jacking” — acquiring the rights to a single-source generic and drastically raising its price. While this does happen occasionally, it is not as common as people may believe.
The problems of price jacking and patent-gaming could be resolved with a system of contractual genericization, or some other form of regulation (i.e., price control) that sets drug prices when their patents expire. We’ll return to this idea in Chapter 6 as well.