Do shortages of generic products affect the brand?

Jul 4, 2022 | Generics, UK Brands

When generic Sertraline Tabs 100mg 28 was launched in November 2005 the market price fell rapidly from £25 to below £5. Since then the average price has risen in five ‘price spikes’ and on four of these occasions the resulting shortage has necessitated granting of a concession price to keep pharmacies profitable.

The sequence of events in that first the price falls to a point at which manufacturers can no longer make a profit, some then cancel manufacturing orders, and stock in the market is then gradually depleted by dispensing until a shortage becomes apparent. At this point competition for the remaining packs forces prices up, the PSNC and the DHSC both notice it and a concession is granted. Then manufacturers request more stock and the price falls again as this becomes available.

The average price of the equivalent brand (Lustral Tabs 100mg 28) has gradually declined as generics have eaten into their business. However, spikes in the generic price do also force the average brand price up temporarily. This may be linked with increased demand for the brand as GPs switch desperate patients from generic to brand. Between the generic price spikes the brand price has declined to very low levels as brand suppliers attempted to compete with the generics. The brand includes both the UK stock supplied by the originator manufacturer, grey market stock which has leaked from the originator’s wholesale partners, and parallel imports.
So, yes, it does look as if the generic price and specifically large price rises do affect the brand.

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