Tribunal overturns ruling against pharmaceutical directors

The CMA has withdrawn the disqualification orders against the directors of Lexon UK, Medreich, Alliance Pharma, and Focus Pharmaceuticals

An independent tribunal has quashed a ruling made against directors at four pharmaceutical companies over allegations of entering into a non-competitive agreement regarding an anti-nausea drug, with investigators stating there were “material errors” made in the case.

Lexon UK, Medreich, Alliance Pharma and Focus Pharmaceuticals were wrongfully accused in a case that caused financial and reputational damage to those involved.

The Competition and Markets Authority (CMA) had claimed that from 2013 to 2018, Alliance Pharma colluded with Focus Pharmaceuticals, Medreich and Lexon UK that the trio would not get a licence to sell the same product in exchange for a profit share.

As a result, the price of the drug prochlorperazine, an anti-nausea medicine often taken by chemotherapy patients, went up by 700 per cent – costing the NHS millions.

However, on Friday (25), the CMA quashed the £30 million fine against the four organisations and withdrew the disqualification orders against the directors who are no longer implicated in any wrongdoing.

The Competition Appeal Tribunal (CAT) stated: "Having considered all the evidence and all of the submissions made by the parties, we find that Alliance and Lexon did not enter into the MEA. There was no such agreement.

"As we have found that there is no MEA and accordingly there was no breach of competition law, the issue of penalty does not arise."

The affected directors include Pritesh Sonpal (Lexon UK), Peter Butterfield and John Dawson (Alliance Pharmaceuticals), Mark Cresswell, Roland Brown and Graeme Duncan (Focus Pharmaceuticals) and Debangshu Dey (Medreich).

When the allegation was initially raised in 2019, Lexon UK founder Nitin Sodha (Sonpal’s uncle) was chairman of the National Pharmacy Association (NPA) but stepped aside from his role as he was also the director and shareholder of Lexon UK.

A family source told Eastern Eye that Sodha wanted the NPA to continue its focus on supporting its members and securing a sustainable future for independent pharmacies and not be distracted by CMA allegations.

The CMA spent millions of pounds in legal fees, taxpayers’ money in order to pursue a claim that wasn't appropriate. The parties subject to these allegations may be eligible to pursue a cost claim from the CMA, the source added

Sodha, who came to the UK from Kenya as a teenager, set up Knights Pharmacy from a porta-cabin in Redditch in 1984.

Along with his brothers Pankaj and Anup and nephew Sonpal, Sodha set up Lexon UK in 1995 and grew it into one of the country’s largest shortline wholesalers based in the Midlands.

He left the company in April last year after it was sold to the Bestway Group, which also runs Well Pharmacy.

Lexon serves 3,000 retail pharmacy customers as well as community pharmacies across the Midlands, northwest and the northeast of England.

It also operates 42 community pharmacies (currently trading as Knights Pharmacy) and specialist developer and manufacturer of generic pharmaceuticals.

Anup, who remains managing director at Lexon, said: “Both businesses, being independent and family-owned, share similar cultural values and have the common goal of providing exceptional service and value to pharmacy, our patients and our supply chain.”

Anup said of the changes: “We’d like to thank Pritesh Sonpal, Nitin Sodha and Pankaj Sodha, who have all decided that this is the time for them to step away from the business. They have all made a considerable impact on our success as a business and will be missed.”