In this case, isn't the barrier to entry itself regulatory? The drug approval process stops new entrants and federal law stops consumers from buying drugs from other countries. Otherwise, I imagine there would be a pretty robust market, given that these are generics and there's no R&D involved.
Capital costs are the barrier for a new generic drug maker, since the approval process is already done. Hense, Cuban starting a new one with his huge capital. But I’ll bet it will take lots of capital and well, they’ll find that there is no incentive to lower the price unless they want to gain market share. I suspect that pharma factories are quite expensive especially given the chemical reagent supply chain already being heavily owned or partnered with the incumbents.
From a quick search, it seems that in the US, generic drugs still go through an approval process called ANDA, but it's simpler because there are no clinical trials. When one drug manufacturer raises prices on its generic, a lengthy approval process still inhibits other drug manufacturers from quickly introducing competing generics, even if they have the capabilities.
