[yequalsx]

Not if there is collusion or cartel pricing. There are also regulatory means of limiting competition. The basic economics notion works in a market that is mostly free. I suspect that most things related to the American health care system do not qualify as a free market.

[notyourday]

There's no cartel pricing in medicine. If there was there would be a competing cartel as it is the case everywhere.

The reality is that companies that make generics are simply too small to be able to compete with Pfizer, Merc, Glaxo etc and for all big talk our scientists in R&D and FDA are bought and sold like trading cards and their opinions change with the opinions of their owners, which is, for example, why FDA accepts garbage studies from Pfizer and does not from itty bitty company that competes with it.

[yequalsx]

Your view of economics does not match reality.

A survey of hundreds of published economic studies and legal decisions of antitrust authorities found that the median price increase achieved by cartels in the last 200 years is about 23%.[1] Private international cartels (those with participants from two or more nations) had an average price increase of 28%, whereas domestic cartels averaged 18%. Less than 10% of all cartels in the sample failed to raise market prices.

Cartels do exist and do not always have a competing cartel. Especially if the cost to entry is too great for a competing cartel to get started. There is also the fact that competition doesn’t just instantly occur. There is a lag in the market and during the lag cartel pricing occurs.

It’s not some immutable law of the universe that completion always springs up in economics. This isn’t always the case and it isn’t always the case that a cartel, oligopoly, or monopoly will instantly lose its pricing power simply because a new player arrives. Sometimes the new player gets absorbed, or becomes part of the cartel.

Quote above from

https://en.m.wikipedia.org/wiki/Cartel

[notyourday]

My view of cartels matches non-academic reality. Here's one:

OPEC

here's a non-member ( which is basically a cartel by itself) fucking it for them:

US

Here's another cartel:

Siemens and Mitsubishi Heavy Industries

Here's a competitor: Hyundai Heavy Industries

When real world meets economic studies, economic studies get clobbered

[yequalsx]

You wrote:

If there was there would be a competing cartel as it is the case everywhere.

Providing two examples of where there are competing cartels is not an argument that this phenomenon occurs everywhere (emphasis originally yours). Your logic is off.

[notyourday]

name other cartels and i will provide their competitors