The UK’s competition watchdog has slapped drug companies with fines totalling more than £260m for hiking prices for the NHS.

The Competition and Markets Authority (CMA) said prices of “life-saving” hydrocortisone tablets had risen by over 10,000 per cent.

The price hike equated to the NHS being charged £80 for a single pack of tablets that had previously cost less than £1, the CMA’s boss said.

The watchdog urged that the fined pharma firms “bought off” potential rivals to avoid them competing with their own versions of the drug and protect their ability to raise prices.

“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,” CMA boss Andrea Coscelli said.

The investigation

The CMA’s investigation found that firms Accord Healthcare, which later changed its name to Accord-UK, and Auden Mckenzie charged the NHS “excessively high prices for hydrocortisone tablets for almost a decade”.

Auden Mckenzie operated under the name Actavis UK in 2015 after it was sold to another pharma firm, Allergan.

Actavis UK was then bought by Accord Healthcare, a subsidiary of parent company Intas Pharmaceuticals, which later changed its name to Accord-UK – meaning Accord-UK and Intas are both liable for the actions of Auden Mckenzie, the CMA confirmed.

“To protect its position as the sole provider of the tablets, and enable it to continue to increase prices, Auden Mckenzie also paid off would-be competitors AMCo (now known as Advanz Pharma) and Waymade to stay out of the market,” the watchdog said in a statement today.

The investigation found that Auden Mckenzie continued to pay off Advanz Pharma even after taking over the sale of the medicine in 2015.

“Auden Mckenzie’s decision to raise prices for de-branded drugs meant that the NHS had no choice but to pay huge sums of taxpayers’ money for life-saving medicines. In practice, the NHS was at one point being charged over £80 for a single pack of tablets that had previously cost less than £1,” Coscelli continued.

The watchdog boss warned that after a fiscally straining 15 months for the NHS, the lofty fines should act as a caution for other pharma firms.

“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,” he said.

A spokesperson for Accord-UK told City A.M: “We are very disappointed by the CMA’s decision. Having only inherited the product in January 2017, we have done nothing but continuously reduce the price in the face of significant competition.

“We maintain that the case against Accord Healthcare is flawed legally and in respect of material facts. We are therefore considering all our options and intend to appeal the decision.”

A spokesperson for Advanz Pharma said: “We strongly disagree with the CMA’s decision and will be appealing. At all times, Advanz Pharma acted in the interest of patients in our efforts to improve the supply of hydrocortisone to UK patients and healthcare practitioners.

“Advanz Pharma takes competition law very seriously. Given the ongoing nature of the case, we
have no further comment to make.”

The firm noted that the CMA’s decision related to events that occurred under prior shareholder ownership between 2012-2016.

A spokesperson for Waymade said: “Waymade disagrees with the CMA’s decision that it was in breach of competition law.  It will consider the CMA decision in detail and its options which include an appeal to the Competition Appeal Tribunal.    

“Waymade has strong compliance practices and takes all its legal obligations very seriously.  The CMA’s decision relates to events which occurred over five years ago.”

Not the first time

The CMA provisionally found that Auden Mckenzie and Waymade broke the law by agreeing not to compete for the supply of hydrocortisone tablets to the NHS back in 2019.

The watchdog ‘provisionally’ revealed that in May 2011, Waymade was ready to enter the market for 20mg hydrocortisone tablets but failed to do so until July 2015. 

Waymade instead froze its own stock and agreed to a deal with Auden Mckenzie under which it received monthly payments aimed at delaying its entry as a competitor in the market.

Auden Mckenzie’s director, from September 2014 to May 2015, Amit Patel was banned from holding a director role in the UK for five years in June last year.

The ban was due to his involvement in “illegal arrangements” during his time at Auden McKenzie’s pharma division, the CMA said.