The Competition Market Authority (CMA) has secured an £8 million payment for the NHS as a result of an ongoing investigation.
Drug firm Aspen has offered to pay the amount, as part of a wider package, to resolve competition concerns over the supply of fludrocortisone acetate 0.1 mg tablets. This is the first time CMA has secured such payment for the NHS through its pharma probes.
Fludrocortisone is a vital medicine mainly used to treat primary or secondary adrenal insufficiency, commonly known as Addison’s Disease. The prescription-only medicine is paid for by the NHS.
The CMA accuses Aspen of violating competition law in 2016 and paying two rival pharmaceutical companies to stay out of the market. The arrangements helped the company to be the sole supplier of fludrocortisone, with the power to set prices without facing any competition.
As the investigation progressed, the drug company approached the regulators with an offer to try and resolve the case. As a result, CMA has now announced the proposed package, which includes:
- Admission of illegality: Aspen admits it was party to an illegal, anti-competitive agreement, by way of settlement.
- Compensation to address CMA’s concerns: Aspen will commit to pay £8 million to the NHS – without the Government having to launch court proceedings for damages. This is intended to address the CMA’s concerns that as a result of the impact of Aspen’s behaviour, the NHS paid a higher price for fludrocortisone.
- Restoring competition: Aspen will also commit to ensuring that, in future, there will be at least two suppliers of fludrocortisone in the UK. This aims to address the competition concerns identified by the CMA and provide the NHS with the opportunity to secure better value for money when purchasing this medicine.
- Fine: Aspen will pay a maximum fine of £2.1 million, once the CMA has concluded its investigation if it reaches a formal decision that the law has been broken. The CMA is continuing its investigation given other companies are involved.
“This is the first time a CMA investigation will secure a payment for the NHS. The £8 million Aspen has agreed to provide will save the NHS the time and expense of seeking damages in court.
“Importantly, Aspen has also committed to ensuring there are more competitors in this market, giving the NHS the opportunity to secure better value for UK taxpayers’ money in the future,” said Andrea Coscelli, the CMA’s chief executive.
The regulator said it was also looking at two other companies that were involved in dealings with Aspen.
“We welcome Aspen approaching us to find a new way of addressing the CMA’s concerns. We believe this resolution will benefit the NHS, patients and taxpayers. Meanwhile, we continue to investigate the two other companies we suspect illegally participated in this arrangement.”
The probe remains ongoing because of the other companies involved. The watchdog consulting on the settlement proposals, with a deadline for responses of Sep 2.
Incidentally, CMA is currently investigating six other pharmaceutical companies in relation to allegations that they broke competition law.