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Why hospitals haven't been in the drug business

In an economics-textbook universe, wed expect to see competitors looking at the high profits that companies are able to charge, and eagerly pile into the market, driving down prices until they are once again at competitive levels. Why doesnt this happen?

By Megan McArdle | Updated on January 23, 2018
It’s understandable if hospitals and patients don’t really care why the prices are going up. But it does matter, because the reasons for the price increase tell us a lot about how successful this hospital-led effort is apt to be. (Photo: Shutterstock)

Fed up with high drug prices? Why not make your own?

Well, okay, for most of us that’s not very practical. But hospitals have decided that’s just what they’re going to do: get into the business of manufacturing generic drugs.

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