Actavis UK overcharged NHS with 12,000% price hike, watchdog says
pharmafile | December 16, 2016 | News story | Medical Communications, Sales and Marketing | Actavis, CMA, NHS
Actavis UK has been accused by the Competition and Markets Authority (CMA) of overcharging the NHS by selling its hydrocortisone generic medication for a price more than 12,000% higher than a branded version of the drug sold eight years previously.
The allegations are levied against the formerly-named Auden Mckenzie division of the business which Actavis acquired last year. Compared to the branded version which cost 70p in April 2008, the company’s 10mg hydrocortisone tablets currently cost £88 per pack. The 20mg variety has also increased in price by 9,500%. As a result, the NHS’ spending on the drug has risen from around £522,000 annually as of 2008 to £70 million by 2015.
The CMA has accused the company of charging “excessive and unfair prices” by exploiting legal loopholes centred on the fact that generic drugs are not subject to the same price regulations as branded equivalents. Under CMA powers, Actavis could be fined up to 10% of their annual turnover.
“This is a lifesaving drug relied on by thousands of patients, which the NHS has no choice but to continue purchasing,” CMA senior responsible officer Andrew Groves commented. “We allege that the company has taken advantage of this situation and the removal of the drug from price regulation, leaving the NHS – and ultimately the taxpayer – footing the bill for the substantial price rises. The CMA’s findings are provisional and no conclusion should be drawn at this stage that there has in fact been any breach of competition law. The CMA will carefully consider any representations of the parties under investigation before determining whether the law has been infringed.”
Hydrocortisone is used to rectify improper natural steroid hormone production, which is linked to potentially fatal conditions such as Addison’s disease. Over 900,000 packs of the drug were dispensed last year alone.
The news comes just over a week after Pfizer was hit with a record-breaking fine for overcharging the NHS for its phenytoin sodium capsules.
Matt Fellows
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