The Competition and Markets Authority (CMA) issued fines yesterday (July 15) totalling more than £260 million to “several pharmaceutical firms” for their role in breaching competition laws in relation to the supply of hydrocortisone tablets.
Auden Mckenzie and Actavis UK (now known as Accord-UK) were found to have charged the NHS “excessively high prices” for hydrocortisone tablets between 2008 and 2018.
According to the CMA, both pharmaceutical firms “exploited the fact that de-branded drugs are not subject to NHS price regulation” and increased the price of 10mg and 20mg hydrocortisone tablets by over 10,000% compared to the original branded version.
However, a spokesperson for Accord Healthcare told C+D that the case against the company is “flawed legally” and that it intends to appeal the decision.
NHS and taxpayer impacted
The CMA’s investigation found that as a result of the price hiking, “the amount the NHS had to pay for a single pack of 10mg tablets rose from 70p in April 2008 to £88 by March 2016”.
“For the 20mg strength, prices rose from £1.07 to £102.74 per pack over the same period,” the CMA added.
The pharmaceutical firms’ “collusion” had a “significant” effect on the NHS and ultimately the taxpayer, the CMA said.
“Before April 2008, the NHS was spending approximately £500,000 a year on hydrocortisone tablets. This had risen to over £80 million by 2016,” it explained.
Accord held liable
Auden Mckenzie was selling hydrocortisone tablets between 2008 and 2015. Actavis UK – which rebranded as Accord Healthcare in 2017 – took over the business in 2015 and is held liable for Auden Mckenzie’s conduct before that date, the CMA said.
Nonetheless, the CMA has fined Accord-UK £155m on behalf of Auden Mckenzie and parent companies Intas and Accord and its former parent firm Allergan.
“Paying off” competitors
Accord-UK and Allergan – as former parents – have also been fined a further £66 million for paying two would-be competitors to stay out of the market, the CMA added.
The CMA said Auden Mckenzie paid pharmaceutical companies Waymade and AMCo (now known as Advanz Pharma) a monthly sum not to enter the market with their own generic versions of hydrocortisone tablets.
After taking over sales of hydrocortisone tablets in 2015, Actavis UK continued to pay off AMCo, the CMA added.
“For their part in the collusion, the CMA has fined Advanz – and its former parent Cinven – a total of £43 million and Waymade £2.5 million,” the CMA explained.
Following the CMA’s decision, the NHS will also be able to seek damages for the firms’ behaviour, should it choose to do so, the watchdog confirmed.
Andrea Coscelli, chief executive at the CMA, said: “These are without doubt some of the most serious abuses we have uncovered in recent years.
“In practice, the NHS was at one point being charged over £80 for a single pack of tablets that had previously cost less than £1.”
Pharmaceutical firms considering next steps
“Having only inherited the product in January 2017, we have done nothing but continuously reduce the price in the face of significant competition,” they stressed.
“We maintain that the case against Accord Healthcare is flawed legally and in respect of material facts. We are therefore considering all our options and intend to appeal the decision.”
Advanz Pharma and Waymade both “disagree” with the CMA’s decision and are considering appealing it.
“Advanz Pharma acted in the interest of patients in our efforts to improve the supply of hydrocortisone to UK patients and healthcare practitioners,” the company said.
A spokesperson for Waymade told C+D that it has “strong compliance practices and takes all its legal obligations very seriously. The CMA’s decision relates to events which occurred over five years ago”.
“Waymade is proud of the fact that it has successfully provided high quality generic medicines, that otherwise would not have been available to wholesalers for over 30 years,” the spokesperson added.
Despite taking over Auden Mckenzie in 2016, Teva stressed that it “has at no point had any control over the Auden Mckenzie hydrocortisone product”.