This is the complete opposite in every facet. I struggle to think of a worse analogy.

Bad analogy, but yes actually. This is one reason people buy drugs from illegal online pharmacies - cost. I

To the extent that meth is a viable substitute for cold medicine you'll have those prices correlating.

But more to your point: the bounty is more similar to an auction. Once you sell the bug to the software producer the black market has no more use of it, assuming it gets fixed.

Supply is constrained, so competition is on the demand side.

On the drug example demand is constrained, if you're the only buyer. So competition happens on the supply side.