Four times over the last 10 years, free market competition between the manufacturers of Olanzapine tablets drove the price to a level where profit was impossible and withdrawal is the only option.
When prices decline in the market, the reimbursement drug tariff often follows suit, falling for the red herring of low prices each time. But there is a point at which manufacturers simply cannot justify making a product when they’re losing money hand over fist. It would seem very sensible that if the Department of Health (DHSC) wanted to prevent shortages they would go out of their way to try not to push the drug tariff prices down to such low levels that profit is impossible.
The graph below shows the very low English Drug Tariff and market prices that occurred just before price spikes, concessions, and a shortage. This should mean that DHSC and manufacturers can use this information to avoid unprofitable territory in the future.