[force_reboot]

I have a PhD in economics, and your claims about monopolies and competition aren't accurate.

Economic theory doesn't state that monopolies always arise, at least not under the circumstances you are describing. If you can buy your competitors, or make a legally binding contract to compete, the yes, monopolies are inevitable. And as you say, inelastic demand does make monopolies more likely, though your intuition that medical goods have inelastic demand may be wrong, e.g. see the RAND health care study where they randomly assign people insurance types, and find the high deductible group consume less healthcare even in emergency situations.

In the general situation, no theory guarantees that monopolies arise in the absence of regulation (apart from the above to cases which aren't the regulation you're discussing).

>Rational actors will spend up to their expected monopoly profits to create a Nash Equilibrium where new entrants into a market will be unprofitable.

In economics, anything that relies solely on Nash Equilibrium is doubtful. In most situations, Nash Equilbria are not unique, and therefore it's hard to say what will actually happen. If the Nash Equilibrium is unique, usually some stronger equilibrium concept applies like dominant strategy equilibrium.

In your case it would be more accurate to say that committing to drive out potential competitors can be a Nash Equilibrium for some parameters.