The Competition Appeal Tribunal (CAT) has upheld the Competition and Markets Authority’s (CMA) findings against two pharmaceutical manufacturers who consistently overcharged hydrocortisone tablets for over a decade.
Auden/Actavis UK's pricing for the critical medicine 'hydrocortisone' from 2008 to 2018 constituted an abuse of their dominant market position, leading to fines nearing £130 million, CMA said in a statement. “These companies increased the price of this crucial medicine by over 10,000 per cent, soaring from 70p to £72 within that period. These are the highest ever CMA penalties upheld by the Tribunal,” the CMA said.
In July 2021, the CMA imposed fines exceeding £265 million on hydrocortisone manufacturers Auden Mckenzie and Actavis UK, which acquired Auden's business in 2015 and subsequently became Accord-UK. The fines were imposed for abuse of dominance and collusion by both the parent companies and potential competitors.
The recent verdict, announced on September 18, comes five weeks after the Tribunal supported the CMA's decision in a separate case regarding the pricing of medicines supplied to the NHS. In that prior case, fines amounted to £84 million.
"These suppliers took advantage of weak competition and regulation to escalate prices," said Michael Grenfell, Executive Director, Enforcement at the CMA. "This violation was severe and its impact on the NHS, patient care costs, and taxpayers is staggering. Tens of thousands of individuals rely on hydrocortisone tablets for treating life-threatening conditions like Addison’s disease. Due to the actions of these companies, NHS expenditure on this vital medicine surged from approximately £0.5 million annually to over £80 million."
The recent judgment focuses solely on the abuse of dominance findings, which constituted £155.2 million of the original CMA fine, the statement added. The Tribunal upheld the CMA’s penalties in all other respects, resulting in the total penalties for the abuses being reduced by approximately £26 million, to almost £130 million. However, the Tribunal has not yet issued its decision regarding the appeal against the CMA's collusion findings.
According to the CMA, the NHS invested hundreds of millions in these drugs, and the judgments now clear the path for the NHS to pursue compensation.
In August, the CAT upheld the CMA's £84 million fine on Advanz Pharma, alongside London-based private equity firms Cinven and HgCapital. This was for inflating the price of the thyroid drug by over 1,000 per cent, escalating from £20 to £248 per package over an eight-year span.
Sukhi Basra