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Pfizer fined record £84.2m over NHS overcharging Pfizer fined record £84.2m over NHS overcharging
(about 1 hour later)
Drugs giant Pfizer has been fined a record £84.2m by the UK’s competition regulator after the price charged to the NHS for an anti-epilepsy drug was hiked by up to 2,600%. Drugs giant Pfizer has been fined a record £84.2m by the UK’s competition regulator after the price charged to the NHS for an anti-epilepsy drug was increased by up to 2,600%.
The Competition and Markets Authority, issuing its biggest ever fine, said the “extraordinary price rises have cost the NHS and the taxpayer tens of millions of pounds”. The Competition and Markets Authority, issuing its biggest fine, said the “extraordinary price rises have cost the NHS and the taxpayer tens of millions of pounds”.
The CMA also fined the drugs distributor Flynn Pharma £5.2m for charging excessive and unfair prices in the UK for phenytoin sodium capsules. The CMA also fined the drugs distributor Flynn Pharma £5.2m for charging excessive and unfair prices in the UK for phenytoin sodium capsules, which are used by an estimated 48,000 epilepsy patients in the UK to prevent and control seizures.
It follows an overnight price increase for the drug of up to 2,600%, after the drug was deliberately debranded, the CMA said. The fines follow an overnight price increase for the drug of up to 2,600%, after it was deliberately debranded, the CMA said. Pfizer makes the drug and sells it to Flynn, which in turn sells it to the NHS. The CMA said that by debranding the drug and making it generic, Pfizer was was free to sharply increase the price it charged Flynn, which in turn further raised the price it charged the NHS.
Generic drugs are generally available to customers at cheaper prices than branded products because they can be manufactured by any company, not just the developer of the original drug.
US-based Pfizer rejected the CMA’s findings and said it would appeal against the decision.US-based Pfizer rejected the CMA’s findings and said it would appeal against the decision.
The amount the NHS was charged for 100mg packs of the drug was hiked from £2.83 to £67.50 before being reduced to £54from May 2014. As a result, the amount the NHS spent on phenytoin sodium capsules rocketed from about £2m a year in 2012 to £50m in 2013. The amount the NHS was charged for 100mg packs of the drug was increased from £2.83 to £67.50 before being reduced to £54from May 2014. As a result, the amount the NHS spent on phenytoin sodium capsules rocketed from about £2m a year in 2012 to £50m in 2013.
The CMA also found that Pfizer, best known for its mass-market drugs such as Viagra, was charging a far higher price for the anti-epilepsy drug in the UK than in any other European country.The CMA also found that Pfizer, best known for its mass-market drugs such as Viagra, was charging a far higher price for the anti-epilepsy drug in the UK than in any other European country.
The watchdog has ordered both companies to drop their prices.The watchdog has ordered both companies to drop their prices.
Philip Marsden, who led the investigation for the CMA, accused the firms of exploitation and said there was no justification for such price rises. Phenytoin sodium capsules are a very old drug and there had been no recent innovation or significant investment, he said. The CMA has four other ongoing investigations into the pharmaceutical industry, with at least one of those focused on excessive pricing.
Marsden said: “The companies deliberately exploited the opportunity offered by debranding to hike up the price for a drug which is relied upon by many thousands of patients. These extraordinary price rises have cost the NHS and the taxpayer tens of millions of pounds. Its fine on Pfizer is the highest imposed in UK competition law, reflecting the seriousness of the case, the watchdog said. The previous record was a £58.5m fine handed to British Airways in 2012 for colluding with Virgin Atlantic on fuel surcharges.
Philip Marsden, who led the investigation for the CMA, accused the firms of exploitation and said there was no justification for such price rises. Phenytoin sodium capsules are an old drug and there had been no recent innovation or significant investment, he said.
Marsden added: “The companies deliberately exploited the opportunity offered by debranding to hike up the price for a drug which is relied upon by many thousands of patients. These extraordinary price rises have cost the NHS and the taxpayer tens of millions of pounds.
“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.”“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.”
Pfizer defended its actions, saying the drugs were loss-making before they were debranded and distributed through Flynn Pharma. It also argued that the price was less than that of the equivalent medicine from another supplier to the NHS.
A spokesman for the CMA said Pfizer recouped its losses on the medication within two months, adding that the price of other drugs did not permit the companies fined to charge “excessive and unfair prices”.
Pfizer said in a statement: “Pfizer refutes the findings set out in the Competition and Markets Authority 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.Pfizer said in a statement: “Pfizer refutes the findings set out in the Competition and Markets Authority 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.” “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.
“Pfizer believes the CMA’s findings are wrong in fact and law and will be appealing all aspects of the decision.”