Competition regulator slaps pharma firms with £260m in fines for overcharging NHS

The UK's competition regulator said on Thursday (July 15) it has fined several pharmaceutical companies a total of more than £260 million for overcharging the NHS in relation to supply of 'life-saving' hydrocortisone tablets.

The Competition and Markets Authority (CMA)'s investigation found Auden Mckenzie and its successor Actavis UK -- now known as Accord-UK -- charged the NHS "excessively high prices" for hydrocortisone tablets for almost a decade.

It regulator also concluded Auden Mckenzie paid off potential competitors AMCo -- now known as Advanz Pharma -- and Waymade to stay out of the market in order to protect its position as sole provider of the tablets.

Actavis UK continued paying off AMCo after taking over sales of hydrocortisone in 2015, the CMA noted.

Prices of the life-saving tablets rose by more than 10,000 percent during the period probed by the regulator between 2008 and 2018, it said.

Tens of thousands of NHS patients depend on tablets of the steroid to treat adrenal insufficiency, which includes debilitating conditions such as Addison's disease.

The regulator fined Actavis UK, Auden Mckenzie, Allergan Plc, Accord Healthcare, Intas Pharmaceuticals, Waymade Plc, Amdipharm, Advanz Pharma and some Cinven entities.

"These are without doubt some of the most serious abuses we have uncovered in recent years," CMA chief executive Andrea Coscelli said in a statement, noting they cost the NHS -- and therefore taxpayers -- hundreds of millions of pounds.

Andrea Coscelli, chief executive at the CMA

“Auden Mckenzie’s decision to raise prices for de-branded drugs meant that the NHS had no choice but to pay huge sums of taxpayers’ money for life-saving medicines. In practice, the NHS was at one point being charged over £80 for a single pack of tablets that had previously cost less than £1.

“These were egregious breaches of the law that artificially inflated the costs faced by the NHS, reducing the money available for patient care. Our fine serves as a warning to any other drug firm planning to exploit the NHS.”

The CMA has fined Accord-UK -- and, for their ownership periods, its parent companies Intas and Accord and its former parent firm Allergan -- £155 million for overcharging the NHS.

It also hit Accord-UK and Allergan a further £66 million for paying the two would-be competitors to stay out of the market.

Meanwhile for their part in the collusion, the CMA has penalised Advanz -- and its former parent Cinven -- with a £43 million levy and Waymade £2.5 million.

Pharma companies to appeal decision

“We are very disappointed by the CMA’s decision," a spokesperson for Accord Healthcare told Pharmacy Business, adding: "Having only inherited the product in January 2017, we have done nothing but continuously reduce the price in the face of significant competition.

“We maintain that the case against Accord Healthcare is flawed legally and in respect of material facts. We are therefore considering all our options and intend to appeal the decision.”

When contacted by Pharmacy Business, a spokesperson for Advanz Pharma said that CMA’s latest decision was related to events that occurred under previous shareholder ownership between 2012 and 2016.

The company added: “We strongly disagree with the CMA’s decision and will be appealing. At all times, Advanz Pharma acted in the interest of patients in our efforts to improve the supply of hydrocortisone to UK patients and healthcare practitioners.

“Advanz Pharma takes competition law very seriously. Given the ongoing nature of the case, we have no further comment to make.”

Likewise, a spokesperson for Waymade said that the company "disagrees" with competition regulator's decision that it broke competition law and that it would "consider the CMA decision in detail and its options which include an appeal to the Competition Appeal Tribunal."

It added: “Waymade has strong compliance practices and takes all its legal obligations very seriously. The CMA’s decision relates to events which occurred over five years ago.”