My guess is that it's extracted from tobacco dust, waste, etc, just as
it is for nicotine used as an insecticide.  It wouldn't think they'd
pay consumer tobacco taxes even if they extracted it from material that
would otherwise be used for making cigarettes.

Most likely it's expensive because it's being sold for human use as a
pharmaceutical, with all the purity, safety and liability issues, as
well as the cost of manufacturing and distributing the products.

Here in Canada, these products are now OTC.  I don't know the effect on
the cost, but consider the cost of buying cigarettes not only for the
period you would be using the gum or patches, but for many years to
come.  If these products enable you to stop smoking, you'll make back
the cost quite rapidly, not to mention avoiding the cost of treating
smoking-related health problems.