"Under monopoly, a greater part of the specific factors of production concerned will remain unused. The common feature of all instances of monopoly prices is that part of the supply, which under competitive conditions would have been offered on the market, is withheld from the market. The most spectacular and objectionable instance of this withholding is the purposeful destruction of the commodities concerned. It happened mostly with consumers’ goods (e.g., coffee) but sometimes also with factors of production."
There are other sources of this drug, notably foreign production, but they don't have the proper licensing. Thus you get a license monopoly. There are a lot of drugs developed overseas that are effective but they are unknown in the U.S market because they are not approved by the proper license monopoly granter. Under pure capitalism, these products would be allowed on the market and independent rating agencies would ensure their quality.
I'll grant you that it is not YET the result of pure capitalism, assuming that there is, indeed, foreign production. But what stops the buyer from consolidating foreign producers as well? It's good for every producer involved - together, they can raise the prices even more.
Totally free markets are unstable.
Nobody has been granted monopoly rights on anything. The GP's article (from 2012) is referring to a situation where there is only one FDA-approved supplier of a product (naturally-derived ACTH). Nothing except lack of motivation is stopping someone else from entering the market. The OP is discussing a particular brand of synthetic ACTH, which may or may not be in the same situation in Canada (sole approved drug).
Have you ever looked at the cost of getting a new manufacturer of a drug approved by the FDA? FDA approval requires a lot more than motivation; if you disagree, I invite you to start manufacturing the drugs yourself (or even contracting it out).
Where motivation, in this case, is also synonymous with 'sufficient bankroll to pass FDA approval', an investment that needs to be repaid, somehow...
Questcor is cornering the market - this has nothing to do with research or availability. In 2012, they acquired the manufacturing of the pig-pituary-gland version of this drug, called "HP Acthar Gel"[0], and hiked the price from $50 to $28,000 per vial. In June 2014, they acquired the synthetic version called "Synacthen Depot" and modestly hiked it by just 2000%. The generic term naming both is ACTH, which is cleverly (?) disguised inside both names.
This is greed, plain and simple - now that Questcor owns the market, they can name any price they want, or the infantile spasm kids suffer greatly (die, or suffer developmental problems of all sorts including retardation). There are other diseases treated with ACTH, and dropping treatment due to cost has effects almost as severe.
Show me the parent who would let their baby die or become retarded because the price was hiked. That's an example of what any completely free market will converge to.
[0] http://www.nytimes.com/2012/12/30/business/questcor-finds-pr...
edit: I stand corrected in my use of "pure capitalism" - government regulation makes it very much not pure capitalism. But the monopolizing of production that we see here is a real-world result of capitalism (pure or impure) - the assumption that "if there's money to be made, some other entity will rise to the challenge" is not supported by evidence in small markets (such as ACTH). If it weren't, there would be no need for antitrust laws.