Discount Offered by Suppliers for Short Dated Products vs. The Number of Months Left till Product Expiry

Sep 13, 2022 | Generics, Parallel Imports, UK Brands

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.

In fact there is no clear relationship between these two factors. Some suppliers offer their short dated products to pharmacists at prices above the reimbursement price, or in other words at prices more expensive than the normal product. This seems counterintuitive, but it may reflect a shortage and that most products are expensive because they are so difficult to find.

Suppliers in general must price short dated products on factors other than the time remaining. We looked at the number of prices we entered into our data, as products which are commonly seen in price lists are normally freely available and easy to source.

We additionally looked at the companies selling short dated products to see if there was a relationship between stock holding and discount. We used the number of prices they quoted for each product as a way of gauging how much stock they had. However, there did not seem to be a relationship between discounts and availability.

We even tried to tie the discounts to the overall average prices and standard deviations. But there was no relationship here either.

So we believe that the pricing of short dated products is done in an ad hoc random way, with no standard industry approach to price setting.

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