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Pfizer and Flynn rapped for overcharging on anti-epilepsy drug

Published on 06/08/15 at 04:05pm
Pfizer building
Pfizer is under investigation by the Competition and Markets Authority

Pharma firms Pfizer and Flynn Pharma have been accused by the UK's competition watchdog of charging ‘excessive and unfair’ prices for the anti-epilepsy drug phenytoin.

Phenytoin sodium capsules, manufactured by Pfizer and distributed by Flynn in its generic form, are used by some 50,000 people in Britain.

The Competition and Markets Authority (CMA) says that in its provisional view, both companies “abused a dominant position by charging excessive and unfair prices” that are in breach of UK and EU competition law.

The watchdog objects both to the prices that Pfizer has charged Flynn, and the prices that Flynn has charged its customers, since September 2012.

Prior to this time, Pfizer manufactured and sold phenytoin sodium capsules to UK wholesalers and pharmacies under the brand name Epanutin. After Pfizer sold the UK distribution rights for Epanutin to Flynn in September 2012, the latter made a generic form of the drug and began selling its own version. It was at this time that costs soared.

Pfizer continued to manufacture Epanutin, selling it to Flynn at prices between 8 and 17 times higher than those at which it had previously sold it in the UK. Flynn responded by selling the drug on to customers at 25 to 27 times higher prices than those historically charged by Pfizer, the CMA asserts.

Before September 2012, the NHS spent approximately £2.3 million on phenytoin sodium capsules annually, a cost which rose to just over £50 million in 2013 and over £40 million in 2014.

Pfizer and Flynn may respond with their own views and evidence before the CMA settles on a penalty, or otherwise. The CMA may fine companies as much as 10% of annual turnover for abusing a dominant position in a market, depending on the seriousness of the infringement.

Ann Pope, CMA senior director of anti-trust enforcement, comments: "The CMA's findings on dominance and abuse are provisional and no conclusion can be drawn at this stage that there has, in fact, been any breach of competition law. We will carefully consider any representations from Pfizer and Flynn Pharma before deciding whether the law has been infringed.”

Pfizer said in a statement that it is co-operating fully with the CMA's ongoing investigation. Flynn is yet to comment at the time of writing.

Joel Levy

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