HAMDEN, Conn.

IMAGINE HIRING someone to help you lower drug costs for your employees only to have that firm gain a monopoly on some drugs and raise prices. In this Alice in Wonderland world, up is down and bad is good. Welcome to the world of pharmaceutical distribution.

For many years I have talked with undergraduate and MBA students about the valuable role that wholesalers, brokers, distributors and other “intermediaries” play in increasing the availability of products and decreasing price. Inevitably, some are surprised when I demonstrate that in many situations having a product pass through one more set of hands can actually lower the price to the consumer.

They are surprised to learn that, notwithstanding large retailers like Wal-Mart, wholesale distributors continue to play a key role in our economy. Much of what we buy and many of the parts that go into the final products made here and abroad will pass through an intermediary firm, such as a distributor or broker.

But now pharmaceutical distributors are proving me wrong, and they are doing so on the backs of those in chronic need of specialty drugs for such conditions as epilepsy. The alarming price increases for specialty drugs has caused some employers to try to push back. But with few alternatives and virtually no competition, they and their employees are trapped.

Specialty drugs have always posed an economic problem for drug firms, insurers, governments and those in need of the drugs. The problem is actually simple, but the solution involves issues of fairness and ability to pay. People with epilepsy, cancer, multiple sclerosis and other serious conditions represent small drug markets with a very clear need. The development costs for drugs that treat such conditions are high and the number of drug users low. So how does the drug company recover its costs?

The basic principle behind insurance is to put all people in a pool and spread the costs of all drugs, including specialty drugs, across the entire pool. Some small percentage of people in the pool will develop the need for a specialty drug but the risks and costs are shared. Another approach is to have the government underwrite the development costs of such drugs so that the pharmaceutical companies can lower the price and still make a profit. A third approach is to make only those in need of the drug pay the full costs. But if some are unable to do so they will withdraw from the market, making the price even higher for those who remain and increasing demands on the health system.

In our system we have a bit of all three in place. But now we have a fourth player: drug firms hired by large firms for the express purpose of lower costs for employees. These intermediaries say their goal is to find the best prices from the drug manufacturers, search for generics or other low-price alternatives and, thus, help employers and employees save money.

But it didn’t take them long to learn that they can increase their own profits by jacking up the price on specialty drugs. The payees have a high need and no reasonable alternative source. This clear conflict of interest undermines the insurance-pool theory and ignores any previous developmental support given by the government.

Business professors espouse the social benefits of markets and competition. Students are taught that competition increases quality and decreases price. Profits are rewards that firms earn by doing their job better than their competitors. I teach that distributors and other wholesalers have been particularly nimble over the past 100 years in ways that benefit consumers.

Now I have to change my lesson plan. Now I have to highlight how some distributors are not earning profits by being good at their jobs but rather by finding little monopolies that have no competition — only victims.

Bill Keep is a professor of marketing at Quinnipiac University, in Hamden, Conn.