Generic shortages are often triggered when the average market price falls to a level at which manufacturers can no longer make a profit. At this point they cancel manufacturing orders, the stock in the market is used up by dispensing to patients, free stock declines and shortages and price rises take place.
Does the same sort of thing happen in branded products? We looked at two products which have recently been included in the serious shortage protocol list by the PSNC, Oestrogel Pump Pack Gel 0.06% 1 (64 Doses) and Ovestin Cream 0.1% 15g to see if there is any sign of the same sort of behaviour.
In the case of Oestrogel Pump Pack Gel 0.06% 1 (64 Doses) there does appear to be a cycle of price peaks and troughs, but the cycle is so long that we cannot see the long term implications. We can only say that the average price started rising again after it hit £3.90.
Ovestin Cream 0.1% 15g on the other hand shows a 9 year cycle in price peaks and troughs, visible in our 20 year BPPI dataset. The absolute low point which triggers a price rise in this product is about £3.60.
So, branded products do show some similarities with generics with price rises being triggered by very low prices. However in the branded case, it may be the parallel importers who decide not to import any more rather than generic manufacturers who decide not to make any more.