Yahoo Finance Drug firms fined over 2,600% NHS price hike for epilepsy treatment
A regulator has ordered two pharmaceutical firms to pay a record penalty, accusing them of overcharging the NHS through a 2,600% overnight drug price hike.
The Competition and Markets Authority (CMA) said it had imposed a £84.2m fine on the manufacturer Pfizer and a £5.2m fine on distributor Flynn Pharma.
It declared each "broke competition law by charging excessive and unfair prices" in the UK for phenytoin sodium capsules, an anti-epilepsy drug, used by 48,000 patients who could not switch to alternative medication for fear it would trigger seizures.
US firm Pfizer (NYSE: PFE - news) , best-known as the maker of Viagra, told Sky News it disputed the findings.
The regulator's investigation found prices were raised by up to 2,600% after the drug, once known as Epanitin, was "deliberately" de-branded in September 2012 when Stevenage-based Flynn bought the UK distribution rights from Pfizer.
It meant that because the drug was now generic, it was no longer the subject of price regulation.
The CMA said the amount the NHS was charged for 100mg packs of the drug rocketed from £2.83 to £67.50, before coming down to £54 from May 2014.
It meant, the watchdog said, that NHS expenditure on phenytoin sodium capsules rose from about £2m a year in 2012 to about £50m in 2013.
"The prices of the drug in the UK have also been many times higher than Pfizer's prices for the same drug in any other European country," the statement said.
Philip Marsden, chairman of the case decision group for the CMA's investigation, said: "This is the highest fine the CMA has imposed and it sends out a clear message to the sector that we are determined to crack down on such
behaviour and to protect customers, including the NHS, and taxpayers from being exploited."
Pfizer said it would appeal "all aspects" of the ruling.
Its statement said: "In this transaction, and in all of our business operations, we approached this divestment with integrity, and believe it fully complies with established competition law.
"Phenytoin capsules were a loss making product for Pfizer and the Flynn transaction represented an opportunity to secure ongoing supply of an important medicine for patients with epilepsy, while maintaining continuity of manufacture.
"When Flynn launched its product, the company set a price that was between 25 and 40% less than the price of the equivalent medicine from another supplier to the NHS which had long been regulated, and appeared to be acceptable to, the Department of Health."
Both firms have been given up to four months by the CMA to reduce their prices, to ensure there is no risk to the supply of the drug to patients who rely on it.
They are not the first to face similar action.
GlaxoSmithKline (Other OTC: GLAXF - news) was among firms hit with a £45m penalty in February after a "pay-to-delay" scandal surrounding blockbuster anti-depressant drug Seroxat.
