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?
The gaps between the more extreme 300mg 100 price spikes has lengthened from 33 days, to 39, to 46 and to 62 at the time of writing. This may relate to manufacturing cycles or to some other factor in the supply chain. But it is obvious from the chart that both packs follow the same pattern and so are probably controlled by the same underlying factors.
In May 2022 the English Department of Health and Social Care DHSC applied an additional price concession in consultation with the Pharmaceutical Services Negotiation Committee PSNC which will help pharmacists during a time of rising prices and shortage. However although the average UK prices of both packs have risen moderately in 2022, no serious price spike has occurred in the data so far.
If a price spike is about to happen, we would expect it in the next three months. If the concession is withdrawn and prices return to normal low levels we may not see another price spike for some time.
However, we believe that price spikes are produced as a result of declining , unprofitable prices caused by market competition and resulting in cancelled manufacturing orders The last 300mg 100 price spike in 2017 was triggered in our view by prices as low as £2.00. More recently the lowest average market price has been £2.15 which may not be quite low enough and unprofitable enough to force manufacturers out of the market.
Previous to the 2017 300mg 100 price spike, prices went down to £4.82 in 2006, £3.26 in 2009 and £2.53 in 2012. So, the ‘trigger’ price declines by about 30% each time. If this is roughly right, then prices for the 300mg 100 would need to drop to £1.40 to trigger a serious price spike. However manufacturing costs may not fall in such a consistent manner, so we wait on events.