Back in September a little-known pharmaceuticals company headed by former hedge fund manager Martin Shkreli raised the price of Daraprim, a sole-source generic medication used by AIDS patients, from $13.50 to $750 a pill. The increase incited public outrage, especially following Shkreli’s unapologetic defense on Twitter. Shkreli—who became known as “pharma bro” during the controversy—can attempt such stunts thanks in part to unregulated market forces. But those same forces might drive him out of business now that an analogous compound drug priced at $1 a pill could soon hit the market. Imprimis CEO Mark L. Baum says the San Diego-based...