The Competition and Markets Authority (CMA) has closed its investigation into a suspected anti-competitive discount scheme developed by pharmaceutical company Merck Sharp & Dohme Limited (MSD). It closed the investigation after finding no grounds for action.
The investigation found that the discount scheme aimed to delay or reduce competition from other infliximab suppliers as MSD’s patent for infliximab product Remicade expired in early 2015. The scheme was an attempt to ensure the NHS would continue to use most Remicade rather than its biosimilars.
The CMA observed that the market worked differently from the way MSD had envisaged when it designed the scheme.
“By linking the level of discount offered on Remicade to the total amount of the drug purchased, the scheme – when coupled with caution in the NHS over moving away from the tried-and-tested drugs – was designed to dissuade the NHS from trialling biosimilars, regardless of the potential savings,” CMA said in a statement today.
“If it had been successful, MSD’s discount scheme could have delayed the NHS from benefitting from increased competition and making significant savings on what it spent on Remicade, which at the time, was over £100 million annually.”
However, this investigation is a warning to businesses which design discount schemes to protect their dominance in the market, that they risk breaching UK competition law, which prohibits agreements or practices that restrict free trading and competition between business entities.