by Peter Kelly – Managing Director, Accord UK

Over recent years, the UK generic medicines market has experienced an uncharacteristic amount of volatility, which has tested the UK’s supply chain.

At Accord UK we set out to analyse the impact of the changes in generic medicine pricing and reimbursement and to share the findings to reflect and provide context over the trends that have impacted the market.

Our initial foray into the numbers looked at the 12 months covering 2017 as this was a key period that led to a number of pharmacy and trade publications citing spikes in generic medicine pricing.

The result of our investigation showed there were a number of factors that resulted in the changes in generic medicine prices and reimbursement, but three key areas stood out.

Firstly, market factors such as currency fluctuations post the Brexit referendum, regulatory changes, including the withdrawal of various GMPs certificates, combined with an overall squeeze on reimbursement pricing had a significant impact.

Secondly, our analysis showed that in 2017 there was a clear increase in the numbers of generic medicines (both number and value) granted a concessionary price versus the previous year. Our data reveals the total value of generic medicines reimbursed, through being granted price concession status, was approximately £75 million in 2016 rising to approximately £340 million in 2017.  While this is a significant increase, research indicates it is only part of the picture and required further exploration (more on that below).

Thirdly and finally, we looked at the average reimbursement price for generic medicines in 2016 and 2017. Clearly throughout 2017, there were significant challenges for all in the supply chain as the UK generic medicines market was more turbulent than we have seen in recent times.  This “perfect storm” created lots of logistic, commercial and political pressure yet despite the challenging environment, patients continued to receive their medicines.

Our analysis provides context on the economic elements of how this all played through to reimbursement pricing.  Moreover, it also demonstrates that in the widest context, the market actually did continue to function despite the challenges created by currency fluctuations and regulator GMP initiated manufacturer withdrawals, alongside a changing UK political landscape.

Our calculations concluded that in 2017, the average price for a pack of generic medicine was £2.46 which, despite the market volatility, is actually a decline in real terms versus 2016 – when we estimate the average price per pack was £2.80. Contrary to the startling headlines, the £2.46 average price across more than 1000 generic medicines that supply a volume of more than 1.1 billion packs of medicine a year, shows the UK market is working and still getting very good value for its generic medicines. After updating our analysis, YTD September 2018 figures are showing that same picture is continuing to emerge. You can read the full report of our analysis in the Accord White Paper.

We have continued to monitor the numbers since that initial report with a particular focus on reimbursement. Despite a few bumps in the road, such as the introduction of Falsified Medicines Directive and a GMP issue with a key manufacturer, the numbers have remained steady.

You can click below to read the Accord White Paper.