UK Regulator Fines Pharma Companies for 10,000% Drug Price Increase
The Competition and Markets Authority (CMA), the UK regulatory body, has fined several pharmaceutical companies for overcharging the National Health Service for hydrocortisone tablets. The prices for this life-saving drug were found to have been hiked up by more than 10,000% over the last 10 years.
In a press release, the CMA said pharmaceutical firms Actavis UK (now named Accord-UK) and Auden Mckenzie did not only charge the NHS with excessively high prices for 10mg and 20mg hydrocortisone tablets but also paid off potential competitors Waymade and AMCo (now named Advanz Pharma) to stay out of the market.
From 2008 to 2015, Auden Mckenzie sold hydrocortisone tablets but was taken over in 2015 by Actavis UK. Auden Mckenzie was the one that paid Waymade and AMCo totals of £1.8 million ($2.5 million) and £21 million ($29 million), respectively, to steer clear of the UK hydrocortisone market. After Actavis UK took over Auden Mckenzie, it reportedly continued with the payments to AMCo.
Accord-UK and parent companies Intas and Accord and former parent Allergan face £155 million ($214.6 million) in fines, while Accord-UK and Allergan are to pay a further £66 million ($91.4 million) for paying off two of their competitors.
For their part in the collusion, Advanz, and its former parent Cinven, will pay £43 million ($59.5 million), while Waymade will pay £2.5 million ($3.5 million). The statement said that Waymade was the only party to the agreement for a short period before its business was sold to Cinven and AMCo took over.
For most of the almost a decade-long overcharging, Auden Mckenzie was the only hydrocortisone supplier in the UK, enabling it to increase its price to the NHS from £49 ($68) per packet to a whopping £88 ($122). In addition to the fines, the CMA said that the NHS could also file charges against the companies involved should it choose to do so.
The case comes as a shock to the medical community, mainly as tens of thousands of citizens depend on hydrocortisone to treat adrenal insufficiency, including life-threatening diseases like Addison's disease. The impact on the NHS, specifically on taxpayers in the UK, is massive. Before 2008, the NHS was reportedly spending around £500,000 ($692,500) per year on these tablets, which had spiked to more than £80 million ($110 million) by 2016.
"These are without doubt some of the most serious abuses we have uncovered in recent years. The actions of these firms cost the NHS – and therefore taxpayers – hundreds of millions of pounds," said Andrea Coscelli, chief executive at the CMA.
"These were egregious breaches of the law that artificially inflated the costs faced by the NHS, reducing the money available for patient care. Our fine serves as a warning to any other drug firm planning to exploit the NHS," she said.
Auden Mckenzie and Actavis UK exploited the fact that de-branded drugs are not affected by the NHS's price regulation guidelines, which enabled them to increase their prices without any blockers. The latter reportedly purchased the licenses for hydrocortisone and then created its own generic versions in 2008.
The CMA's infringement case is addressed to these companies: Accord-UK, Auden Mckenzie, Allergan, Accord Healthcare, Intas Pharmaceuticals, Waymade, Amdipharm, Advanz Pharma Services (UK), Advanz Pharma Corp., Cinven Capital Management, and Cinven SA, Cinven Partners. Information on the fines is detailed on the CMA's website.