The Competition and Markets Authority (CMA) has accused four pharmaceutical firms of colluding illegally between 2013 and 2018 to restrict the supply and drive up the price of an anti-nausea drug.
In a statement of objections, the CMA alleges the cost of Prochlorperazine rose from £6.49 per pack to £51.68 after Alliance Pharma, Focus, Lexon and Medreich agreed not to compete against each other for the supply of the prescription-only pills, also known as “buccal” tablets, to the NHS.
This drove up the annual bill paid for by the NHS for the drug by 700%.
The CMA says that between 2013 and 2018, the annual cost of 3mg dissolvable Prochlorperazine tablets increased from approximately £2.7m to £7.5m, even though the NHS dispensed fewer packs during that period.
The CMA also alleges in its provisional findings that, before entering into this arrangement, Lexon and Medreich had been planning to launch their own jointly-developed Prochlorperazine. Although Medreich obtained a licence to supply the drug in January 2014, it did not supply the product until November 2017, the statement said.
The CMA’s Ann Pope said: “Agreements where a company pays a rival not to enter the market can lead to higher prices and deprive the NHS of huge savings that often result from competition between drug suppliers.”
One of the firms named, Alliance Pharma, denied the allegations.
In a statement, Alliance said it had “no involvement in the pricing or distribution of Prochlorperazine since 2013, when it was out-licensed by the company to Focus Pharmaceuticals Limited on an exclusive basis as is normal market practice. Alliance has not had control of or influence on, and nor has it benefited from, any price increases.”
If it eventually determines that competition law has been broken, the CMA can impose a financial penalty of up to 10% of each company’s worldwide turnover.
The companies concerned will now have the opportunity to respond to the CMA’s provisional findings.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing Agency for the Professional Services Sector.
