E-DRUG: UK generic manufacturers accused of massive profiteering
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Dear E-druggers
Use the following link for an article in one of the Sunday newspapers highlighting massive price rises in the cost of common generics medicines in the UK:
http://www.dailymail.co.uk/news/article-1295610/NHS-doesnt-care-cost-medicin
e-Drugs-firms-accused-profiteering-raising-prices-ONE-THOUSAND-cent.html.
[reapir link]
The price of some widely used generics has risen by up to 1,000% in just 2 years. The investigation by the UK 'The Mail on Sunday' has prompted the Department of Health to launch a review of the increases and examine what action could be taken against manufacturers found to be making excessive profits.
Chris Forshaw
Independent Pharmaceutical Advisor
Simon's Town, Cape Town
forshaw.chris@gmail.com
E-DRUG: UK generic manufacturers accused of massive profiteering (2)
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This is certainly interesting. In other sectors this would be known as
parity pricing (where locally manufactured goods are priced at just under
the import good cost).
I hope this issue is contextualised properly and not in the way the UK has
dealt with issues in the supermarket sector that showed clear deference to
the Big Boys in the sector.
It is expected that generic producers, like brand owners, will maximise
profits. If there is collusion, or oligopolies, then this needs to be taken
into account. However, it should also be borne in mind that pricing of
generics cannot be looked at from a simple cost of production plus a little
on the top perspective. Pricing with parity to branded drugs needs to be
taken into account. Generic producers should be more competitive but unlike
the brand name companies do not have the cushion of monopoly to lean on, nor the time to build brand loyalty.
The bottom line is, pharma is a business like any other and generic
producers pricing should be looked at holistically (including vicious
competition especially from a policy level from governments and BigPharma).
One only has to recall the anticompetitive practices in the Vitamin C market to know that this is typical business behaviour.
However if the generic market is not competitive, that is a problem. But
this needs to be contextualised in a market where the lead producers gain
advantage because of monopoly patent rights. Be interesting to see what
comes out of this especially the findings regarding the policy decisions
(like EC trans-shipment directive, anti-counterfeiting legislation and ACTA)that create market uncertainty for generic producers. But I doubt it will go that far.
Riaz Tayob
SEATINI - South Africa Chapter
riaz.tayob@gmail.com