In a monopoly situation, the price tends towards 100X in my example, which is still less than the value provided. Even in a monopoly, nobody's paying more for a product than they receive value from it.
Yes, it may still seem unfair, but what else are you proposing? Nobody should sell the product? How is that making anyone better off?
You only see people asking questions about "well, who captures the extra value? what's fair?" etc when you don't have a market. When you actually have a market, then these questions cease to be relevant, because the price is already set.
The problem has nothing to do with free market concepts breaking down, or disagreements about what's fair. The problem is that we've artificially prevented this market from existing. Fix that and the problem goes away.
In theory, you could calculate the exact value provided by this drug (under the QALY model).
Under your theory a fair method to price life saving drugs doesn't exist. The person getting the drugs will effectively extract infinite value while the company will only extract a finite value.
Not really true, I'm afraid. People killing themselves (or allowing others to kill them) to ensure a payout to their families happens with some regularity.
2. Usually this happens because they place a higher value on their children's life and well being than their own. So even in the case were someone does place a value on their own life, it's only in relation to someone else's life.
The case of 2 is interesting because it shows that of the people who would accept a finite sum for their own life, very few would accept a finite sum for their chidren's life.
Since paying for the child's healthcare is the responsibility of the parent in a free market, we are back to my previous point that their is no fair free market way to price life saving drugs.
You've just pushed the problem around. Saying "get rid of the free market" in only a solution if you have a concrete alternative.