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16.12.16

CMA accuses Actavis UK of 12,000% price rise of lifesaving drug

The Competition and Markets Authority (CMA) has accused the pharmaceutical company Actavis UK of overcharging the NHS for a “lifesaving” drug by raising its price by over 12,000%.

The competition watchdog has accused Actavis UK of breaking competition law by raising the price of hydrocortisone tablets from 70p to £88 over an eight-year span, with the CMA claiming that from 2008 to 2015 the NHS’s spending on the drug rose from £522,000 to £70m.

Hydrocortisone, the medical form of the hormone cortisol, is used to treat life-threatening conditions like Addison’s disease and COPD.

The new owner of Actavis UK, Teva, which only acquired the business recently as part of its wider deal to buy Actavis Generics, said that it would defend the company against the allegations.

Andrew Groves, senior responsible officer at the CMA, said: “This is a lifesaving drug relied on by thousands of patients, which the NHS has no choice but to continue purchasing.

“We allege that the company has taken advantage of this situation and the removal of the drug from price regulation, leaving the NHS - and ultimately the taxpayer - footing the bill for the substantial price rises.”

Actavis UK acquired the rights to make generic hydrocortisone tablets in 2008 from Merck Sharp & Dohme (MS&D), which had produced a branded version of the treatment. Generic or de-branded drugs are not subject to price regulation.

Upon comparing Actavis UK’s current prices for hydrocortisone tablets with those offered by MS&D in 2008, the CMA found that Actavis charged the NHS £102.74 per pack of 20mg pills – a significantly higher figure than the £1.07 a pack MS&D requested for their branded version.

Teva responded that competition from the generic medicine market saved the NHS in England and Wales £13.5bn, with its own medicines accounting for around £3.2bn of that figure.

A Teva statement said: “Although the pricing of the acquired Actavis product (hydrocortisone) under investigation was never under Teva’s effective control, Teva believes that intervention by the CMA in prices for generic medicines raises serious policy concerns regarding the roles of both the CMA and the Department of Health.”

The CMA has confirmed that currently its findings are provisional and that no conclusion has yet been drawn that Actavis UK broke competition law.

“The CMA will carefully consider any representations of the parties under investigation before determining whether the law has been infringed,” Groves said.

The CMA has recently been clamping down on drugs companies for overcharging the NHS. Earlier this month, it fined Pfizer a record £84.2m and Flynn Pharma £5.2m for their roles in raising the price of phenytoin sodium capsules, an anti-epilepsy treatment, by up to 2,600%. Both Pfizer and Flynn Pharma are set to appeal against the decision.

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