CMA fines firms £35m for illegal arrangement
pharmafile | February 3, 2022 | News story | Business Services |
The Competition and Markets Authority (CMA) has fined firms over £35 million for an illegal arrangement in the supply of important NHS prescription anti-nausea tablets. The fines are the result of a CMA investigation into the conduct of several pharmaceutical firms.
The CMA has fined the firms in relation to an arrangement under which a competitor was not paid to launch a product, and which enabled price increases. The authority found that, from June 2013 to July 2018, Alliance Pharmaceuticals, Focus (now owned by Advanz, previously owned by the private equity firm Cinven), and Lexon were involved in an arrangement restricting competition in the supply of a drug to treat nausea, dizziness and migraines.
Another company, Medreich, was involved in the arrangement between February 2014 and February 2018. The arrangement restricted competition in the supply of prochlorperazine 3mg dissolvable or ‘buccal’ tablets to the NHS. Alliance Pharmaceuticals appointed Focus as its distributor under the arrangement, and Lexon and Medreich were paid a share of the profits Focus earned by selling Alliance’s product. In return, Lexon and Medreich agreed not to compete in the supply of these tablets in the UK.
“The size of the fines reflects the seriousness of this breach,” Andrea Coscelli, Chief Executive of the CMA, said. “These firms conspired to stifle competition in the supply of this important medication, so that the NHS – the main buyer of the drugs – lost the opportunity for increased choice and lower prices. While the arrangement was in place, the price increased significantly for a drug that people rely on to manage debilitating nausea, dizziness and migraines.”
From December 2013 to December 2017, the prices paid by the NHS for prochlorperazine rose by 700%. Consequently, between 2014 and 2018, the annual costs incurred by the NHS for prochlorperazine increased from around £2.7 million to around £7.5 million, even though the number of packs dispensed fell.
“All firms should know that we will not hesitate to take action like this against any businesses that collude at the expense of the NHS,” Andrea Coscelli added.
Ana Ovey
