I’m not talking about insulin. There is sometimes an incentive under capitalism to shift research money towards developing band-aid products that can be sold repeatedly. The OP made an extremely broad claim that requires way more evidence than is available. For capitalism to literally solve scarcity, there can be exactly zero counter examples. If even a single problem is more profitable to band-aid than to fix, his whole starry-eyed prediction fails.

At some point, when we ignore things like barriers to entry and imperfect competition, we stop talking about reality and start wishing. I can’t build a pharmaceutical lab in my garage. That’s just not how capitalism works. Even with zero regulation, we’d still have barriers to entry that create imperfect competition. Is it possible that regulations are one of many complex factors causing the insulin market to be semi-monopolistic? Sure. But even if the incentives were perfect, there is a wealth of literature in behavioral economics that suggests incentives are not destiny. This is a classic problem where creating a dedicated program whose priority can be long-term public good and not short-term profit can boost a weakness in our current system.