Pharma firms and private equity group slapped with £35m fine over ‘illegal’ supply collusion which led to price of NHS drug surging 700%
- Firms broke the law by colluding over the supply of Prochlorperazine
- The drug is an important treatment for nausea, dizziness and migraines
- NHS costs soared as the price of drug jumped from £6.49 to £51.68
Several pharmaceutical firms have been handed fines totalling more than £35million after Britain’s competition watchdog found they had come to an ‘illegal arrangement’ in the supply of NHS prescription drugs.
Drugs firms Alliance Pharmaceuticals, Lexon, Medreich and the former and current owners of Focus – Advanz and private equity group Cinven – broke the law by colluding over the supply of Prochlorperazine, an important treatment for nausea, dizziness and migraines.
The illegal activity resulted in the price of the drug surging by 700 per cent, from £6.49 per pack of 50 tablets to £51.68 between 2013 and 2017, the Competition and Markets Authority revealed today.
The price of Prochlorperazine surged from £6.49 per pack of 50 tablets to £51.68 between 2013 and 2017
As a result, the NHS was forced to pay £7.5million for the drug by 2017, up from £2.7million in 2013, even though the number of packs dispensed fell.
The firms were found to have colluded to ensure a competitor was paid not to launch a rival product, thereby enabling the price of the drug to climb.
Alliance appointed Focus as its distributor and Lexon and Medreich were paid a share of the profits earned by Focus on the supply of the Alliance drug.
Before entering into the arrangement, according the CMA, Lexon and Medreich were in the process of jointly developing their own rival drug.
Although Medreich obtained a licence to supply Prochlorperazine in January 2014, it did not supply the product until late 2017.
The CMA’s fines include £7.9million for Alliance Pharmaceuticals, a £7.3million fine for Lexon, a £4.6million penalty for Medreich and a fine for Focus of £15.5million, split between current owner Advanz and previous parent Cinven.
Medreich’s fine was reduced by 40 per cent for admission and co-operation with the probe.
Andrea Coscelli, chief executive of the CMA, said: ‘These firms conspired to stifle competition in the supply of this important medication, so that the NHS – the main buyer of the drugs – lost the opportunity for increased choice and lower prices.
‘While the arrangement was in place, the price increased significantly for a drug that people rely on to manage debilitating nausea, dizziness and migraines.
‘All firms should know that we will not hesitate to take action like this against any businesses that collude at the expense of the NHS.’