Usually the FTC would not allow a company to acquire all competitors. Hell, plenty of drug companies have been forced to divest assets because they are acquiring a company that has a competitor.
What may have happened is a drug shortage. Generic companies run on razor thin margins and sometime stop manufacturing drugs that become unprofitable for them. If enough companies do that and you're left with only one manufacturer, price increases are typical.
Cephalon came up with a cute idea. Rather than acquire generics makers, they buried them with bogus patent lawsuits. Then they offered to settle: a bunch of cash up front in exchange for delaying production of generic drugs for a few more years.
Generic companies play the same game. Attack the branded drug makers patents and then settle out of court. It's just how the generic industry works, it all comes down to patents.
I remember a quote from the CEO of Apotex (one of the biggest generic manufacturers in the world). The CEO said "I don't care about scientists, I just need the best lawyers).
What may have happened is a drug shortage. Generic companies run on razor thin margins and sometime stop manufacturing drugs that become unprofitable for them. If enough companies do that and you're left with only one manufacturer, price increases are typical.