Here’s why drug prices rise even when there’s plenty of competition

At least eight pharmaceutical companies sell a decades-old drug that treats gallstones, but the competition has done little to keep its price down.

Instead the price has skyrocketed.

Two years ago, ursodiol’s wholesale price was as low as 45 cents a capsule. Then in May 2014, generic drug manufacturer Lannett Co. hiked its price to $5.10 per capsule, and one by one its competitors followed suit – with most charging nearly the same price.

Experts say this is not how a competitive marketplace is supposed to work.

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By Melody Petersen