Some are, yes. Where aggregate demand is sufficiently low, the market cannot support more than one manufacturer. And some diseases are quite rare.
That doesn't make a lot of sense. If the disease is that rare and the patients' ability to pay is that low, how was it profitable for a supposed natural monopolist to develop the drug in the first place? "Natural monopolies arise where the largest supplier in an industry, often the first supplier in a market, has an overwhelming cost advantage over other actual or potential competitors". Well, what is that advantage? ... Drugs are generally too easy to make and other natural barriers to entry are just too low to constitute a serious obstacle.
You can't just dismiss the regulatory influences on the pharmaceutical market and expect your resulting arguments to reflect the real world.
I can synthesise all kinds of pharmaceuticals in my garden shed; But I won't be allowed to sell them for human use - and nor should I be.
The market is, and should be, highly regulated; And those regulations lead to the unprofitably of low volume products for second and subsequent suppiers.
So who dismissed them? So who said you should be allowed to sell pharmaceuticals you synthesized in your garden shed? So who said the market shouldn't be highly regulated?
Natural barriers may well be no obstacle; But in the pharmaceutical industry, natural barriers are a trivial part of the barriers that actually exist.
I.e., pharmaceuticals are not a natural monopoly. They're an artificial monopoly.
The point is, when Don started this whole subthread with:
The next thing you might consider is that there is competition which should drive down prices. But that isn't really what is at the heart of capitalism. What is at the heart is winning and monopolies and market barriers and price fixing and patenting and IP in order to block competition because that guarantees profit. Only through regulation is that nature of capitalism somewhat mitigated, and I say somewhat, because regulation thus far hasn't stopped market barriers. Much of Big Pharma, too, hasn't produced new drugs recently and so they acquire smaller companies which is another way of crushing competition. Maybe take a look at this guy:
https://en.wikipedia.org/wiki/Martin_Shkreli
he was neglecting half the picture. The price was only able to shoot up because Shkreli
bought the marketing rights. Think about the implications of that. He bought
marketing rights for a drug the FDA approved
in 1953. Why the devil does that drug have such a thing as "marketing rights"? So no, this isn't about "patenting and IP in order to block competition because that guarantees profit".
The patent expired over forty years ago! Today GlaxoSmithKline makes it in Britain and sells it for under a dollar a pill. Canada imports it from Britain and sells it for two dollars a pill. There isn't any capitalism reason, and there isn't any natural monopoly reason, and there isn't any "nor should I be allowed to sell pharmaceuticals I synthesized in my garden shed" reason, for Americans to be barred from importing British pills that have fully passed the requirements of British drug safety regulations. British regulators are every bit as capable of weeding out dangerous products as American regulators. Canadians are not dropping like flies from recklessly buying British medicine. Harry Bosch had it right: it's extremely difficult to raise prices, when government allows competition to operate. Yes, we need regulation to mitigate the nature of capitalism; but we equally need capitalism to mitigate the nature of regulation. The fact that Americans aren't allowed to buy it from Britain for the same price as Canadians is entirely the choice of Congress. Congress created Shkreli.