Egregious competition law breach costs NHS millions in artificially inflated drugs costs

Today, more than 5 years after the CMA opened its investigation into suspected unfair and excessive pricing of hydrocortisone tablets in the UK, it has imposed fines of over £260 million on pharmaceutical firms Auden McKenzie and Actavis UK (now known as Accord-UK), AMCo (now Advanz Pharma) and Waymade.

The CMA found that Auden Mckenzie and Actavis UK had abused their dominant position in charging unfair and excessive prices by increasing the price of hydrocortisone tablets by over 10,000% in a ten year period from 2008 to 2018, compared to the original branded version of the drug.  Prices for this essential medication increased from 70p to £88 over a ten year period for a pack of 10mg tablets and from just over one pound to over one hundred pounds for a packet for 20mg tablets.  In addition, the CMA found there to have been illegal agreements, commonly known as “pay-for-delay” agreements, between  Auden Mckenzie and Actavis UK and potential manufacturers of competing generic versions of the hydrocortisone tablets whereby those potential competitors were paid millions to stay out of the market for years allowing Auden Mckenzie and Actavis UK to continue to exploit the NHS.

The CMA has a number of live investigations into suspected competition law infringements by pharmaceutical companies including into Advanz Pharma (formerly Concordia) for excessive and unfair pricing for liothyronine tablets, which increased in price by 1,605% over a seven year period.  In addition, its investigation into the existence of an anticompetitive agreement between Focus Pharmaceuticals, Medreich, Alliance Pharmaceuticals and Lexon relating to the supply of prochlorperazine 3mg buccal tablets continues.

Andrea Coscelli, Chief Executive of the CMA described the conduct as “an egregious breach of the law” and “without doubt some of the most serious abuses we have uncovered in recent years”.  The CMA notes that in addition to the fines imposed on the pharmaceutical companies, the NHS will be able to seek damages for the firms’ behaviour which will have resulted in significantly increased prices for the NHS – and ultimately UK taxpayers. 

It is to be hoped not only that the infringement finding dissuades other firms from engaging in similar conduct but also that the NHS takes action to recoup the losses it has suffered – yet again – at the hands of another unscrupulous pharmaceutical giant seeking to exploit the NHS and the UK citizens served by the NHS.