On 16 December 2016, the UK Competition and Markets Authority (“CMA”) issued a Statement of Objections alleging that Actavis UK (formerly Auden Mckenzie) has breached competition law by abusing its dominant position through charging excessive and unfair prices for hydrocortisone tables to the UK National Health Service (“NHS”).
The CMA found that Actavis UK increased the price of 10mg and 20mg hydrocortisone tablets by over 12,000% and 9,500% compared to the branded version sold by a different company prior to April 2008, as de-branded (also known as genericised) drugs are not subject to price regulation.
Hydrocortisone tablets are used as the primary replacement therapy for those with adrenal insufficiency which is a life threatening condition. Prior to 2008, the NHS spent £522,000 a year on hydrocortisone tablets but this had risen to £70 million a year by 2015. Andrew Groves, the CMA Senior Responsible Officer said that the NHS had no choice but to continue purchasing the hydrocortisone tablets due to the seriousness of the condition which they treat and that Actavis UK “has taken advantage of this situation and the removal of the drug from price regulation”.
Actavis UK will have the opportunity to respond to the Statement of Objections before the CMA makes it final decision on the allegations.
There is currently significant CMA activity in the pharmaceutical sector. Last week, Pfizer and Flynn Pharma were given a record fine of almost £90 million collectively for excessive and unfair pricing of the drug phenytoin sodium after it was de-branded (click here for our briefing), and in February 2016 a number of pharmaceutical companies were fined £45 million for anti-competitive agreements and conduct in relation to the supply of Paroxetine. The CMA has also stated that it has three other ongoing investigations into the pharmaceutical sector.