Concordia and Actavis UK Accused of Overpricing
The UK’s Competition and Markets Authority (CMA) has accused Concordia and Actavis UK of breaking competition law by agreeing to delay competition and keeping the price of hydrocortisone tablets artificially high.
In its allegations, the CMA said that between January 2013 and June 2016, the companies entered agreements under which Actavis UK (formerly Auden Mckenzie) abused its dominant position by inducing Concordia (formerly Amdipharm) to delay entering the market with its competing drug.
Under the deal, Actavis is alleged to have instead given Concordia a fixed supply of its own 10mg tablets at a very low price for resale in the UK, allowing it to remain the country’s sole supplier during most of the three-and-a-half-year period. During that time, the cost of the drug to the National Health Service (NHS) soared by 80%, from £49 per pack to £88.
Actavis bought the previously branded version of hydrocortisone – the primary replacement therapy for people whose adrenal glands do not produce sufficient amounts of natural steroid hormones – in 2008, effectively debranding the drug, excluding it from NHS price regulation and opening up competition from generic versions. Concordia was Actavis UK’s first potential competitor to obtain marketing authorization for the tablets.
In December 2016, a separate CMA investigation accused Actavis of charging excessive prices to the NHS for the drug, following a 12,000% price rise over the course of several years.
The authority has provisionally found that the agreements enabled the UK pharmaceutical company to prolong high prices in the market and deprive the NHS of the “significant price falls that would be expected to result from true competition.”
Anti-competitive agreements can cost the NHS, and ultimately the taxpayer, by stopping competition bringing down the cost of lifesaving drugs like hydrocortisone tablets, commented Andrew Groves, senior responsible officer at the CMA. “We will now carefully consider any representations of the companies under investigation before determining whether the law has been infringed,” he said.
Responding to the allegation, Concordia said it believes that Amdipharm’s conduct was not in breach of competition law, and it will review the CMA’s provisional position before responding in detail. Actavis UK has not officially commented on the allegations.
If found guilty of infringement, the CMA can impose a penalty of up to 10% of the businesses’ annual worldwide group turnover. In December 2016, the CMA fined US pharmaceutical giant Pfizer a record £84.2m for overcharging the NHS for an anti-epilepsy drug. Pfizer appealed the fine in February 2017.
Meanwhile, the UK authority said it has two other ongoing investigations into the pharmaceutical sector, without revealing further details.