Page 6 - P4304.1-V102_PS Magazine - Oct 24 (PRINT)

So, what is a concession and why do we hear so much about them?
A concession is essentially where the price of a generic suddenly
starts to increase quickly before there has been a chance for the
NHS prescription services to adjust the drug tariff. So very quickly
in a month, contractors are suddenly paying more for a generic
then they will get back in that month’s drug tariff.

As a short-term measure, an emergency drug tarriff will be
introduced to try and minimise this impact – this is known as a
price concession and is announced towards the end of the month.
The concession is set by taking an average of the prices across a
number of wholesalers.
Concessions are not new – but the number
of products that have been awarded

concessionary status since November 2021
have increased significantly.

Why do we see the prices of generics rapidly increase? This
typically happens when demand for a product significantly
outstrips the supply, or in other words, where there are shortages
leaving just a few players to cover the demand for the whole
market. This could be because generic manufacturers pull out of
producing a molecule as it is no longer cost effective. It may also
be due to a shortage of a key ingredient causing supply to fall
below demand. Alternatively it could be because the demand for a
molecule suddenly increases in the market which can be driven by
pricing increases and the market spot buying generics.
The last few months have seen the number of products on
concession remain relatively stable which can be seen in the chart
belowbelow – but the numbers are still higher than a few years ago.

6 6 P S M a g a z i n e | G e n e ri c s … P ri c i n g … a n d B u y d i r e c t o n l i n e a t P S U K . co . u k
PS Magazine | MDS Terms Information Concessions
Buy direct online at PSUK.co.uk

10/09/2024 17:02:06
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