Last September, the Pharmaceutical Services Negotiating Committee (PSNC) announced it was in "urgent discussions" with the Department of Health and Social Care (DH) about the "catastrophic" effect of generics shortages on contractors' cash flow.

Supply issues and price rises were initially triggered by the closure of a Bristol Laboratories manufacturing site in Luton, and a Dr Reddy’s site in India, following inspections by the European Medicines Agency (EMA) the previous month.

Speaking to C+D last month (April 25), BGMA director general Warwick Smith said up to 120 products had been affected by the regulatory action.

PSNC’s list of products on concession show those items that have been most affected since the two suppliers’ licences were suspended and have been subject to higher prices as a result, Mr Smith said.

However, “other manufacturers increased their production to fill the gap” in supply of those affected products, he added.

“My understanding is that there are [now] adequate supplies for all but maybe a couple of products…and the market has pretty much caught up to fill the gap,” he added.

However, the costs involved in increasing production means generics prices may “still be higher” than the prices listed in the DH's monthly drug tariff, he said.

“There will obviously be a bit of time before prices stabilise,” Mr Smith stressed.

Further price hikes could happen

“We have the lowest prices in Europe and I think we have probably gone as low as we can,” Mr Smith said.

“That means when there are issues to deal with, there is not much wiggle room.”

Mr Smith said while “factors” such as “exchange rates post-Brexit” and the cost of implementing the Falsified Medicines Directive, will not disrupt the supply of generics, “it probably does mean there will be an increase in price”.

“I’m pretty comfortable that manufacturers will meet [demand],” he said, but “if we face that sort of perfect storm” created by these factors, “those prices have to go up”.

These costs will “inevitably” be passed through the supply chain, Mr Smith added.