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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%.

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.

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?

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.

After the originator product loses its exclusivity (LOE) and generics have been launched, the market price of the generic can fall very quickly. Those products with more generic licence holders tend to fall faster than those with fewer. However, where product prices fall very rapidly, licence holders can see the market price fall below a point at which they can make a profit and they may decide not to make any more. At this point the remaining stock in the market becomes more valuable as the amount available to supply pharmacies declines. The result of this is an increase in the price as the few boxes left in wholesaler warehouses increase in value.

After the originator product loses its exclusivity (LOE) and generics have been launched, the market price of the generic can fall very quickly. Those products with more generic licence holders tend to fall faster than those with fewer. However, where product prices fall very rapidly, licence holders can see the market rate fall below a point at which they can make a profit. At this point the remaining stock in the market becomes more valuable as the amount available to supply pharmacies declines.

We tend to assume that different forms of generic solid dose products are equally cheap to produce and so will see their prices decline equally fast after launch. But is this true? To find out Wavedata Looked at 70 capsule products (SKUs) and 343 tablets, tracked their average UK sales prices to pharmacies and dispensing doctors in the months after launch. We then used this to create an estimate of how quickly competition between suppliers forced prices down.

Four packs of Duloxetine E/C Caps have shown repeating cycles of shortages, price variation sand concessions.  These sorts of cycles are seen in about 80% of generic products, and can result in severe shortages which affect patients, pharmacies, clinicians and tax payers. We believe that these cycles are predictable and the low prices which trigger shortages can be anticipated.