Pfizer fined a record £84m for anti-epilepsy drug price hike
Pharmaceuticals Pfizer and Flynn have been fined for a collected £90m for hiking the price of an anti-epilepsy drug to the NHS.
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The Competition and Markets Authority (CMA) fined Pfizer a record £84.2m and distributor Flynn Pharma for £5.2m, and ordered them to reduce their prices, after finding that they broke competition law for charging “excessive and unfair” prices for phenytoin sodium capsules, an anti-epilepsy drug.
The fines follow an 2,600% increase in the price of the drug overnight after it was de-branded in September 2012, as the price charged to the NHS for a 100mg pack jumped from £2.83 to £67.50. It reduced to £54 in May 2014.
NHS expenditure on the drug increased from about £2m a year in 2012 to about £50m in 2013.
The CMA said that the final decision and fines relate to both the prices that Pfizer charged to Flynn Pharma and the prices that Flynn Pharma charged to customers since September 2012.
It said both companies held a “dominant position in their respective markets for the manufacture and supply of phenytoin sodium capsules and each has abused that dominant position by charging excessive and unfair prices”.
The drug is used by an estimated 48,000 patients in the UK and the CMA said that epilepsy patients who are already taking phenytoin sodium capsules are not usually able to switch to another manufacturer's version of the product, due to the risk of loss of seizure control.
Before September 2012, Pfizer sold the drug under the brand name Epanutin and the prices were regulated. Pfizer then sold the UK distribution rights for Epanutin to Flynn Pharma, which de-branded it so it was no longer subject to regulation.
Philip Marsden, chairman of the Case Decision Group for the CMA's investigation, said: "Businesses are generally free to set prices as they see fit but those holding a dominant position should not abuse this situation and set prices that are excessive and unfair. There is no justification for such rises when phenytoin sodium capsules are a very old drug for which there has been no recent innovation or significant investment.
"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 "refutes" the findings which led to CMA's decision.
"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.”