Charles Joynson, WaveData MD, has conducted some indepth analysis to try to identify early warning signs of generic shortages. Here’s the third and final instalment
In the first part of this series we looked at Losartan Tabs 12.5mg 28 and at the four shortages of this product which have occurred over the last ten years. We concluded that each shortage was preceded by a low ‘unprofitable’ price which forced manufacturers out of the market for a while, and that the lowest of these £1.64 would have had this effect on all four occasions.
In the second part we explored the link between the number of concessions granted for over 500 products over 10 years and the low shortage inducing prices such as the £1.64 mentioned above. The result was that we couldnt find a link and concluded that the severity of shortages are not determined by how low the market price falls.
Today we want to explore the low market prices which happen before a shortage begins, and try to work out when manufacturers should alter their forecasts. Looking at the low market prices which precede shortages, it does appear that the vast majority of these take place when the generic product is being sold to pharmacies for between 1% and 7% of the branded products’ reimbursement price.
As an example, if the branded product is reimbursed at £10.00, then the generic version will be heading toward a shortage when it’s commonly being sold to pharmacies for less than £0.70.
Therefore for safety it would be better if England avoided reimbursing generic products at levels which would force market prices below 7% of the originator brand’s list price. If this was put into effect it would reduce the number of concessions granted dramatically, and may pay for itself by avoiding the cost of these concessions.
What price triggers a shortage? Part 3a
What price triggers a shortage? Part 3b