On 3 March 2017, the Competition and Markets Authority (“the CMA”) issued a Statement of Objections to Actavis UK (“Actavis” formerly Auden Mckenzie) and Concordia (formerly Amdipharm) alleging that both companies broke competition law between January 2013 and June 2016 by entering into anti-competitive agreements under which Actavis incentivised Concordia not to enter the market with its own competing hydrocortisone tablets.
The Statement of Objections also alleges that Actavis abused its dominant position by inducing Concordia to delay its entry into the market through these agreements.
As part of the agreements, Actavis supplied Concordia with its own 10mg hydrocortisone tablets at a very low price for Concordia to resell. This enabled Actavis to remain the only supplier of the tablets in the UK and prolong the high prices in the market during the period of time in which the cost to the NHS for the drug rose from £49 to £88 per pack.
It deprived the NHS of the price fall which would have resulted from true competition from Concordia, who had obtained marketing authorisation for 10mg hydrocortisone tablets and would have been the first potential competitor to Actavis.
Andrew Groves, the CMA Senior Responsible Officer said that anti-competitive agreements can cost the NHS “by stopping competition bringing down the cost of lifesaving drugs like hydrocortisone tablets” and alleges that the agreements in this case were intended to keep Actavis as the sole supplier and in a position “to dictate and prolong high prices”.
In December 2016, a separate CMA investigation accused Actavis of charging excessive prices to the NHS following a 12,000% price increase over several years. This situation occurred after Actavis brought the branded version of the drug, meaning that the drug then became de-branded and no longer subject to NHS price regulation.
The CMA has been very active in the pharmaceutical sector. In February 2016, the CMA fined a number of pharmaceutical companies a total of £45 million for anti-competitive agreements and conduct in relation to the supply of the anti-depressant drug Paroxetine, and in December 2016, the CMA fined Pfizer and Flynn Pharma almost £90 million for excessive pricing of the anti-epilepsy drug phenytoin sodium. There are also 2 other ongoing pharmaceutical sector investigations.