CMA fines pharmaceutical company more than £100m

02 Aug 2021

There has been a recent spate of companies buying up the exclusive rights to sell drugs and then marking up the prices; other companies have got together and agreed to carve up markets in drugs and make supernormal profits. In some cases, the NHS has seen an increase in drug prices by thousands of percent.
 
The Competition and Markets Authority (CMA) has reacted in a series of cases targeting what it describes as ‘unfair inflation’.
 
In the most recent instance, the CMA has fined Advanz and its private equity owners over £100m for inflating the price of drugs causing losses to the NHS and the tax payer.
 
Following an investigation the CMA found that between 2009 and 2017 Advanz charged ‘excessive and unfair prices’ for supplying liothyronine tablets which are used to treat thyroid conditions; prices rose by up to 6,000% during the period, whilst production costs remained stable.
 
The increased spending on the drug (from £600k in 2006 to £30m in 2016) led the NHS to put the drug on the ‘drop list, preventing GPs from prescribing liothyronine tablets and denying many patients the most effective treatment for their condition. The CMA’s decision will make it easier for the NHS to pursue compensation should they choose to.
 
This decision comes as the CMA is undertaking a number of investigations into pharmaceutical companies and pricing practices. Just last month the authority fined a number of companies £260m for competition law breaches resulting in inflated costs for generic hydrocortisone tablets over the course of 10 years.
 
The CMA’s crackdown on pharmaceutical companies should lead to the fair pricing of drugs for the NHS and private consumers alike so that patients can continue to receive the treatment they need.
 
Those who would abuse market dominance or seek to carve up markets should be aware that the CMA is being increasingly aggressive – and not just in respect of Big Pharma.

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