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Summary
- The Competition and Markets Authority has accused pharma major Pfizer and Flynn of overcharging for the anti-epileptic drug.
- Both Pfizer and Flynn exploited a loophole so that they would not face price regulation.
The UK's Competition and Markets Authority (CMA) have come down hard on pharmaceutical giants Pfizer (LON:0Q1N) and Flynn Pharma, accusing them of illegally overcharging the National Health Service (NHS) for vital anti-epilepsy drugs. The pharma giants have been accused of using their dominant position in the market to escalate drug prices by 2,600%.
The CMA alleged following the price rise, spending by the NHS on phenytoin sodium capsules rose to about £50 million in 2013 from £2 million in 2012. As per the regulator, Pfizer supplied the drug to Flynn who sold the drugs at an enormously high price, around 2300-2600 per cent higher to pharmacies and wholesalers.
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In 2016, the CMA had imposed a £89.4 million fine on Pfizer and £5.2 million on Flynn Pharma, respectively. Pfizer and Flynn Pharma took the matter at the Competition Appeals Tribunal (CAT) in 2018, which upheld the original findings of the CMA. The matter went to Court of Appeal, who too dismissed the case sending it back to the CMA
The CMA ordered an immediate probe in June 2020 to further assess the case. The latest accusations are the conclusion of the year-long battle between the watchdog and pharma giants.
The CMA felt that as many of the patients depend on the drug to prevent a life-threatening seizure, protecting them should have been the primary responsibility of both the companies. Besides, as the taxpayer's money is used to fund the NHS, cheating them was an unforgivable mistake. The watchdog believes that pharma giants should have acted responsibly and set examples rather than indulging in such malpractices, which are used to treat approximately 48,000 patients in the UK.
Of late, the CMA has been stringent on pharma companies, who similarly have inflated the prices of the life-saving drug, and those related with Auden Mckenzie and Actavis were accused of increasing the price of hydrocortisone, an adrenal insufficiency drug and fined a total of £260 million.
Similarly, pharma company Advanz and its owners too came under the hammer for inflating the price of the drug named its liothyronine tablets, used to treat thyroid hormone deficiency.
CMA’s findings are still provisional and both, Pfizer and Flynn Pharma have chance to respond, if they were indeed at fault.
