UK regulator cracks down on anti-competitive practices

UK watchdog, the Competition and Markets Authority (CMA), is coming down hard on anti-competitive pricing practices. Following hot on the heels of fines totalling over £260m for competition breaches relating to the supply of hydrocortisone tablets, and fines and repayments to the NHS of over £10m concerning fludrocortisone used to treat primary or secondary adrenal insufficiency, the CMA has now fined Advanz over £100m for inflating the price of liothyronine tablets used to treat thyroid hormone deficiency.

What is particularly interesting about these cases is that the medicines in question are off-patent. Rather than control by patent owners – which often attracts the interest of competition regulators and journalists – these competition problems arise from carving up of markets through anti-competitive agreements. This then leads to a reduction in competition and ratcheting up of the price of the drug on the market. Generic products are not subject to the same NHS price regulation as proprietary medicines.

The CMA points out that Advanz increased the price of liothyronine tablet packs from £20 in 2009 to £248 in 2017 – an increase of 1,110%. Likewise, whereas before April 2008, the NHS was spending approximately £500,000 a year on hydrocortisone tablets, this had risen to over £80 million by 2016.

Ultimately, this means that the taxpayer takes the pain as NHS purchasers are forced to pay more.

There are more pharmaceuticals cases in the pipeline - the CMA says that a number of other investigations are continuing.

Find out more about our competition law and life sciences services.

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