Drugs firms accused of fixing price of NHS drug

Competition watchdog alleges Actavis UK and Concordia deal pushed up cost of lifesaving tablets

A variety of pills and drugs
(Image credit: PHILIPPE HUGUEN/AFP/Getty Images)

Pharmaceutical companies Actavis UK and Concordia have been accused of striking a deal to fix the price of a lifesaving NHS drug.

Provisional findings from the Competition and Markets Authority (CMA) allege the two firms agreed not to compete with each other on hydrocortisone tablets, pushing up the price of the pills to £88 a packet, an almost 100 per cent rise.

Around 943,000 packets of the drug, which is used for life-threatening conditions such as Addison's disease, were distributed by the NHS in the last year alone.

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The CMA said: "Anti-competitive agreements can cost the NHS, and ultimately the taxpayer, by stopping competition bringing down the cost of lifesaving drugs like hydrocortisone tablets.

"We allege these agreements were intended to keep Actavis UK as the sole supplier of a drug relied on by thousands of patients - and in a position which could allow it to dictate and prolong high prices."

The watchdog accused the firms of agreeing, between January 2013 and June 2016, that Concordia would not launch its own version of the drug, leaving Actavis UK the sole producer supplying the NHS for most of that time, the BBC says.

Meanwhile, says City AM, Actavis UK supplied Concordia with a fixed supply of the drug at a very low price to sell on to UK customers.

In forming their agreement, the firms were "depriving the NHS of the significant price falls that would be expected to result from true competition", the CMA claims.

The watchdog emphasised its findings were provisional and said it would listen to arguments from the two firms before deciding whether anything illegal had taken place.

Actavis UK owner Teva confirmed the company was the subject of "allegations of anti-competitive conduct" but declined to comment further, said the BBC, which had also contacted Concordia for comment.

In December, the CMA accused Actavis UK of charging excessive prices to the NHS for the tablets, after a separate investigation. It found the price had risen by 12,000 per cent over the course of several years, says The Independent.

Actavis accused of overcharging NHS for life-saving drug

16 December

Another drugs company has been accused of overcharging the NHS millions of pounds by debranding a medication.

The Competition and Markets Authority says pharmaceutical firm Actavis increased the price of a hydrocortisone pill used to treat life-threatening illnesses such as Addison's disease by more than 12,000 per cent, causing the health service's annual spend to surge from £522,000 to £70m.

Andrew Groves, the senior responsible officer at the watchdog, said: "This is a life-saving drug relied on by thousands of patients which the NHS has no choice but to continue purchasing."

Actavis acquired the rights to manufacture the generic form of the hydrocortisone pill in 2008. A branded form had been developed and previously sold to the NHS by Merck Sharp & Dohme, says the BBC.

At the time, says the CMA, a 20mg packet of the pills cost the health service £1.07. By 2015, the generic version was priced at £102.74.

When drugs are developed, they typically enjoy a protected period during which they are sold exclusively by one provider as a branded treatment. The NHS buys them using bespoke contracts that are subject to price controls.

These restrictions are removed when the drug is made generic. In theory, market competition should act to control the price; however, in some cases there is no alternative provider and several firms have been accused of massively ramping up the price.

Last week Pfizer was fined a record £84.2m after it was deemed to have increased the price of an epilepsy drug by 2,600 per cent. It has said it will appeal the ruling.

Actavis UK is the generic medicines business that was part of the pharmaceuticals giant now known as Allergan, which makes Botox. It was sold in 2015 to Israeli firm Teva, which in turn is planning to sell it to Indian sector rival Intas Pharmaceuticals, says The Guardian.

Teva said it was not in charge of the company when the price changes were made, but added that "competition from generic medicines saves the NHS in England and Wales £13.5bn per year overall" and that its own products account for £3.2bn of this.

It continued: "Teva believes that intervention by the CMA in prices for generic medicines raises serious policy concerns."

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