Last month Turing Pharmaceuticals felt the backlash after a medication they sold for $1 a pill in 2010 increased overnight to $750 a tablet.

Politicians like Hillary Rodham Clinton and Bernie Sanders were quick to claim that this is why we needed more government intervention in the healthcare system. But at the time I pointed out that the reason Turing was able to raise the price so spectacularly was not because of a failure of the free market but because of government intervention:

The free market isn’t the reason [Turing’s CEO] Shkreli was able to raise the price. In fact, if he had to sell his product in a truly free market environment the price would likely remain low. And even now, if he continued to keep the price high, some enterprising pany would start making Daraprim themselves, increasing the supply and lowering the cost.

And that’s just what happened. That enterprising pany turned out to be Imprimis Pharmaceuticals. pany announced yesterday that it will start offering pounded formulations of pyrimethamine (the generic name for Daraprim) and leucovorin in oral capsules starting as low as $99.00 for a 100 count bottle, or at a cost of under a dollar per capsule.

In making the announcement Mark L. Baum, CEO of Imprimis, said,

It is indisputable that generic drug prices have soared recently. While we have seen an increase in costs associated with pliance, recent generic drug price increases have made us concerned and caused us to take positive action to address an opportunity to help a needy patient population. While we respect Turing’s right to charge patients and panies whatever it believes is appropriate, there may be more pounded options for medications, such as Daraprim, for patients, physicians, panies and pharmacy benefit managers to consider.

Imprimis believes the new drug will earn pany a “reasonable profit.” But even more important will be the goodwill and PR value that e with their decision to offer a low-cost option to Turing’s monopoly on Daraprim.

While this is an example of how the free market can benefit both businesses and consumers, es with a catch. Imprimis was only able to implement this solution by exploiting a loophole in current government regulations:

There’s a limitation, Baum said: The formulation is not FDA-approved, and can legally only be sold through a doctor’s prescription to a specific individual. The specific ingredients are FDA-approved, Baum said, and pounding operations are FDA-inspected.

Filing for FDA approval of pound itself would take years and millions of dollars, Baum said. By not filing, Imprimis can keep prices down and make a significant profit, even for less than $1 a capsule, Baum said in a Thursday interview.

You can bet that teams of pharmaceutical lobbyists are working right now to convince politicians to require pounds to be FDA approved. That will give more power to both rent-seeking panies and to the government that seeks to “protect” us by making medicine unaffordable.

The politicians will ignore the fact that it was only by not requiring direct FDA approval that the drug was able to be offered at a lower price. Instead, pletely ignore the fact that much of the costs of the drugs is due to their federalregulations and they’ll propose the needed “solution” to lower the costs is addingeven more regulations.

That’s the inevitable destructive cycle our current regulatory environment keeps us trappedin. But that’s a problem for tomorrow. For today, we can celebrate an example of the free market circumventing government and increasing human flourishing. It’s a small win overall, but it’s a significant victory for those in need.