Competition and Markets Authority cuts £20mn from previous penalty after long legal battle
UK competition authorities have cut £20mn from a £90mn fine against two pharma companies for overcharging the NHS for a life-saving epilepsy drug, after a long legal battle.
The Competition and Markets Authority on Thursday fined Pfizer and Flynn Pharma £70mn for exploiting regulatory loopholes to charge unfairly high prices for phenytoin sodium capsules — a drug that prevents seizures — for more than four years.
The ruling follows a legal battle between the companies and the CMA over an earlier decision to fine them £90mn.
The price rose when Pfizer passed distribution of the drug, previously branded Epanutin, to Flynn in 2012. Flynn sold it as a generic, unbranded drug. This meant it was no longer subject to price regulation and the companies could set prices at their own discretion.
Over the following four years, Pfizer and Flynn pushed prices up sharply.
Pfizer charged prices between 780 and 1,600 per cent higher than previously. The US pharmaceutical company supplied the drug to Flynn, which then sold the capsules to wholesalers and pharmacies at a price between 2,300 per cent and 2,600 per cent higher than the prices previously charged by Pfizer.
This behaviour led to NHS annual costs for phenytoin capsules increasing from £2mn in 2012 to approximately £50mn the following year, said the CMA, which fined Pfizer £63mn and Flynn £6.7mn.
Andrea Coscelli, CMA chief executive, said phenytoin was an essential drug relied on daily by thousands of people and that both companies had to face the consequences of their illegal action.
“These firms illegally exploited their dominant positions to charge the NHS excessive prices and make more money for themselves — meaning patients and taxpayers lost out,” he said.
Pfizer said it disagreed with the latest CMA decision and would appeal against it.
“As we have consistently stated throughout this process, ensuring a sustainable supply of our products to UK patients is of paramount importance to us and was at the heart of our decision to divest phenytoin capsules to Flynn Pharma in 2012,” said Pfizer.
The CMA originally decided to fine the companies £90mn in 2016 for abusing their dominant position.
The drugmakers avoided paying the fine after winning an appeal against the CMA’s decision in 2018. The CMA challenged this ruling at the Court of Appeal enabling it to reconsider the evidence and issue its latest ruling.
Flynn did not immediately reply to a request for comment.
Additional reporting Kate Beioley in London
Fonte: Financial Times