CMA accuses pharma firms Pfizer and Flynn of charging NHS illegal prices for anti-epilepsy drug
The UK’s competition watchdog has accused pharmaceutical firms Pfizer and Flynn of breaking competition law and overcharging the NHS for crucial anti-epilepsy drugs, in a new re-investigation following a years-long battle with the companies.
Pfizer and Flynn “abused their dominant positions” and charged the NHS “unfairly high prices” for life-saving phenytoin sodium capsules, for which they were the dominant suppliers to the UK, the CMA has found in a new investigation five years after it first fined the companies.
The CMA found that “the companies exploited a loophole by de-branding the drug – known as Epanutin prior to September 2012 – with the effect that the drug was not subject to price regulation in the way branded drugs are,” it said in a statement on Thursday.
This led the NHS with “no choice” but to pay new prices that were increased “overnight”, according to the CMA.
NHS spending on phenytoin sodium capsules rose from around £2m a year in 2012 to about £50m in 2013, the statement said, representing a price hike of between 780 per cent and 16000 per cent.
The watchdog’s accusations went further, as it said that Pfizer then supplied the drug to Flynn, “which sold it to wholesalers and pharmacies at prices between 2,300% and 2,600% higher than those they had paid previously.”
The accusations are the culmination of a years-long battle between the CMA and the two pharmaceuticals firms.
In 2016, the watchdog slapped a record £89.4m fine on Pfizer and Flynn following an “in-depth investigation” for breaking competition law and charging “unfairly high” prices for the phenytoin sodium capsules.
The companies then appealed against the decision and in June 2018, the Competition Appeal Tribunal (CAT) upheld the CMA’s decision around the companies’ dominance, but referred the matter of abusing the law back to the UK watchdog – a process known as remittal.
Flynn and the CMA then elevated matters to the Court of Appeal, which in March 2020 dismissed Flynn’s appeal in its entirety and upheld the CMA’s appeal.
This led to the watchdog re-investigating the matter as of June 2020, leading to the decision today.
“Thousands of patients depend on this drug to prevent life-threatening seizures as a result of their epilepsy,” said Andrea Coscelli, Chief Executive of the CMA.
“As the CAT recognised, this is a matter that is important for government, for the public as patients and taxpayers, and for the pharmaceutical industry itself. Protecting these patients, the NHS and the taxpayers who fund it, is our priority.”
At this stage, the watchdog’s findings are provisional, and both the pharma companies have an opportunity to respond and decide whether they did indeed break the law, the statement added.