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A Canadian drugmaker has been accused of abusing its dominant position by raising the price of an essential drug more than 5,500 per cent for the National Health Service
Concordia Healthcare forced the NHS and UK taxpayers “to pay over the odds for important medical treatments”, said the Competition and Markets Authority, which is stepping up efforts against so-called price gouging in the pharmaceuticals sector.
The NHS spent more than £34m on Concordia’s liothyronine drug last year, compared with £600,000 in 2006. The average price paid per pack rose from £4.46 to £258.19, while production costs remained “broadly stable”, said the CMA.
The tablet is one of few suitable treatments for some sufferers of hypothyroidism, a condition caused by a hormone deficiency that can lead to depression, tiredness and weight gain.
Compared with the US, where the president has accused drugmakers of “getting away with murder” by charging high prices for many drugs, the UK has stricter controls over pricing for most treatments.
However, there has historically been less regulation in the market for generic off-patent drugs, where competition should in theory keep prices low. Liothyronine was debranded in 2007, allowing Concordia to increase the price.
A law introduced this year was intended to close a loophole that made it easier for companies to raise prices for generics.
Concordia said the regulator was also investigating pricing of two further products, but one has been “put on a slower investigative track”, while the other was “not an administrative priority” for the CMA.
The company, which specialises in niche generic medicines where it faces little competition, has been criticised for similar practices in the past. Its AMCo division raised the price of one treatment for bacterial conjunctivitis 14-fold in the UK shortly after acquiring the product, while the price of another ear drop increased fivefold over a three-year period.
Concordia said it does “not believe that competition law has been infringed”, saying that “the pricing of liothyronine has been conducted openly and transparently with the Department of Health in the UK over a period of 10 years”.
It added: “Over that time, significant investment has been made in this medicine to ensure its continued availability for patients in the UK.”
The CMA’s statement of objections was also addressed to Cinven and HgCapital, private equity groups which had previously owned parts of the international business before Concordia acquired it in 2015. Cinven and HgCapital both declined to comment.
Tuesday’s statement from the CMA was a provisional ruling. Andrea Coscelli, chief executive, said it will “carefully consider any representations from the companies before deciding whether the law has in fact been broken”.
If the watchdog concludes the companies did breach competition law, it may impose a fine of up to 10 per cent of annual worldwide group turnover.
The CMA has been stepping up pressure on pharmaceutical groups in recent years. Last year it levelled its largest fine against Pfizer for unfairly raising the price of a drug used to treat epilepsy. A number of groups including GlaxoSmithKline were charged £45m for conspiring to reduce competition for one of GSK’s antidepressants.
The regulator is pursuing a further seven investigations into drug pricing and pharmaceutical competition issues, including a separate probe into Concordia’s behaviour with regards to another drug.
Concordia is accused of accepting incentives from the UK arm of Actavis to discourage it from introducing its own version of a treatment for problems with adrenal glands, such as Addison’s disease, allowing Actavis to keep prices artificially high.