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Branded Crestor was launched in the UK June 2003, and this was followed by the appearance of the first parallel import just one month later. The number of market offers in price lists for parallel imported versions of Crestor follows a typical ‘whale’s back’, with a rapid introduction in 2004 and 2005, an erratic build up to a peak in 2011, and a gradual decline toward 2022.
Infections with the Group A Streptococcus (GAS ) are very common at the moment and can cause Scarlet Fever. This mainly affects children and Amoxicillin is the most common treatment. However, the availability of and prices of Amoxicillin products for pharmacies and dispensing doctors has been put under pressure by this outbreak.
Since price concessions were first granted in 2003, the number has been gradually increasing each month. During 2022 the number granted has equalled or exceeded 100 in 8 months out of 11. Additionally we have noticed that products likely to be granted concessions have very narrow pharmacy profit margins. This makes sense since it is the PSNC, representing pharmacies, which negotiates concession with the department of health DHSC. However, this increasing trend highlights a serious problem with the way these products are reimbursed. This is done using the drug tariff, and in order to supply good value for tax payers some products have their tariff squeezed as much as possible. This may be great for tax payers in the short term, but it’s not great for pharmacies, wholesalers and manufacturers. Pharmacies struggle to make a profit, despite the concession, as often it’s not high enough and they spend inordinate amounts of time chasing shortages.
Do combined, multi constituent products which contain more than one chemical, such as Levodopa + Carbidopa + Entacapone Tabs, suffer slower price decay after generic launch than normal single constituent products? It would make sense to assume so as we have previously found that products such as liquids, devices , creams and ointments all decay more slowly than solid dose generic products.
Are products which have received concessions (NCSOs) from the department of health and social care (DHSC) less profitable than non-concession receiving products? After Viatris’ round table on branded generics at the Palace of Westminster earlier this month we decided to investigate this, in the expectation of seeing a lower profitability for concession products. So we divided all the generics we have market prices for into two groups, those which had received concessions and those which had not, and compared the profitability of each. We used the English drug tariff and the average market price rather than the concession price to calculate the normal monthly profit, as we wanted to see if the drug tariff was at fault in some way. We expected to see a graph showing that non-concession products were more profitable than the concession products, and supposed that the graph of profit over time would feature two lines. The higher would be the non-concession products with a higher profit, and the lower would be the concession NCSO products with less profit. This might have told us that the drug tariff pricing for concession products was too aggressive and should be relaxed.
Where pharmacies are unable to purchase generic products at prices less than the drug tariff the DHSC sets price concessions in consultation with the PSNC using information derived from manufacturers and wholesalers. The number of price concessions granted in each month has been growing since they were introduced in 2003. The majority of the growth has occurred since 2013, and major spikes in the number of monthly concessions have occurred in Nov 2017, Feb 2019, May 2020 and Sept 2022.
In the UK a major part of the branded medicine supply is provided by manufacturers outside the UK. These products are made for use in the EU but imported into the UK as parallel Imports (PIs) appear in the market within a couple of years of brand launch, and gradually replace the UK supplied brand until they in their turn are replaced by generics. We have previously seen that the exchange rate is a key driver of import prices, but we thought we’d have another look at this and at market competition. As before we saw that the exchange rate is a driver of the market price of Abilify Tabs 10mg 28, but the relationship does not seem to work before March 2015.
Branded generics as well as originator brands are included in the VPAS (The Voluntary Scheme for Branded Medicines Pricing and Access) reimbursement scheme. This is agreed by Government, NHS and industry to ensure the consistent and affordable supply of branded medicines to UK patients. VPAS caps spending on branded medicines, but if there is an overspend, the additional amount is collected as a rebate from pharmaceutical companies. This rebate has increased over the last few years starting at 3.74% in 2014 and reaching 15% in 2022. However, the rebate being discussed for 2023 is forecast to be over 30%.
In recent years branded generics, which are branded versions of off-patent medicines other than the originator, have been included in the VPAS Voluntary Scheme for Branded Medicines Pricing. This has meant that the manufacturers of branded generics have had to return a rebate to the NHS. This rebate is expected to rise to between 23% and 30% in 2023, and the BGMA have been very vocal on its potential negative impact. The prices that both generic manufacturers and wholesalers charge their chemist and dispensing doctor customers are often the same for the true generic and its branded generic equivalent. Often price lists include them on the same line with a single price. However, there are differences in the pricing of the two types of products, as a few wholesalers list them separately.
Rasagiline Tabs 1mg 28 was launched onto the UK market as a new generic in August 2015 and since then has had three periods of shortage, during which prices have risen and concessions have been granted by the DHSC to improve supply and pharmacy profitability. These price spikes are believed to be caused by the market price falling below the level at which manufacturers can make a profit, which results in the cancellation of manufacturing orders and the drying up of available dispensing stock.
Wavedata have looked in depth at generic product shortages, but have not so far examined branded product shortages in any depth. Therefore we looked at the ABPI’s serious shortage protocol (SSPS) list published on their website each month and chose the list of products with serious shortages which were not expected to be resolved till the end of October 2022. This list included Ovestin Cream, Oestrogel Pump Pack Gel and Sandrena Gel Sachets. We looked at the average, maximum, minimum and standard deviation for the prices which were offered to or paid by pharmacies or dispensing doctors over the last ten years to see if there was any change in the run up to the shortage.
Two packs of Gabapentin Capsules are subject to regular price increases which have happened four times over the last 20 years. The period between each has increased each time and the highest price has declined. But is another price spike overdue and when will it occur?
Is there a correlation between the Euro to Pound exchange rate and the average price of parallel imports sold to pharmacies and dispensing doctors?
It seems sensible to assume that parallel imports are affected by the Euro to Pound exchange rate as they are sourced from Europe and sold in the UK. Therefore we looked at the prices we had seen advertised for parallel imports by wholesalers and importers over the last 22 years. Then we compared the exchange rate with the average PI price and with the number of PI offers we had seen in price lists sent to pharmacies and dispensing doctors.
Efient was launched in the UK in 2009 and the first parallel imports appeared on the UK market in 2011 after a two year ‘honeymoon’ period. In the graph below each colour represents a UK wholesaler selling parallel imported Efient to UK pharmacies and dispensing doctors.
Efient was launched in the UK in 2009. This was followed by a two year honeymoon period, which ended in 2011 when the first parallel imports appeared on the UK retail market.
Recently we ran a report (also on https://www.wavedata.co.uk/articles ) which showed the long term prices of Efient and Prasugrel Tabs 10mg 28. Today we thought we’d look at the market activity for the same products over the last 10 years. Market activity or record count is the number of prices we see for a product in our data. It gives an indication of the amount of activity wholesalers and manufacturers are putting into selling these products to their customers.
Efient Tabs 10mg 28 first appeared in Wavedata’s data, collected from pharmacies and dispensing doctors, in April 2011. Parallel Imports appeared before UK packs, which suggests there was a period during which Efient was sold to pharmacies through linked systems without appearing in price lists. There is normally a two year ‘honeymoon’ period before parallel imports start to threaten UK sales and as Daiichi Sankyo’s media website says that Efient was launched in the UK on the 8th April 2009, a two year honeymoon period sounds about right.
Boom bust cycles exist for up to 81% of generics as market competition forces prices down to levels which cannot be profitably be sustained by manufacturers, at which some stop manufacturing. This leads to a reduction in the stock available to dispense, followed by a shortage and a price rise. Manufacturers then spot that prices are higher and profitable again, so recommence manufacturing. Prices then start to decline as free enterprise restarts and the whole cycle repeats. These cycles are normally about 3 or 4 years long, but they can be longer on occasion.
Discount Offered by Suppliers for Short Dated Products vs. The Number of Months Left till Product Expiry
In theory, a product which is due to expire very soon should be offered to pharmacies at a large discount, whereas a product with many months of life remaining should only have a small discount. However, in this analysis and in others we’ve run in the past this is not the case.
When the market price of a generic product declines to a point where manufacturers can no longer make a profit, they may decide to cancel or not commission the next batch of stock. Consequently, the price goes up as the available stock in the market declines.