Monday 17/06/2019 - 04:33 am

Drug firms plotted to make NHS pay more, says watchdog

2017.03.04 05:37

Two drug companies have been accused of striking an illegal agreement to ensure that the price of a life-saving medicine remained high, costing the NHS tens of millions of pounds a year.

The competition watchdog said yesterday that it had provisionally found that Actavis had offered incentives to Concordia International to stop a competing version of hydrocortisone tablets going on the market.

Actavis agreed to provide Concordia with some of its own supply of the drug at a “very low price” for its rival to sell to patients in Britain, the Competition and Markets Authority said.

The alleged deal in January 2013 allowed Actavis to maintain its monopoly over the medicine, which is used as a treatment for patients with under-functioning adrenal glands, including sufferers of Addison’s disease.

The drug subsequently rose in price from £49 to £88 per pack, having already increased from 70p since Actavis began supplying it in 2008. The new costs added £54 million to the NHS drug bill in 2015.

Andrew Groves, from the watchdog, said: “Anti-competitive agreements can cost the NHS, and ultimately the taxpayer, by stopping competition bringing down the cost of life-saving drugs like hydrocortisone tablets.”

He said the watchdog was alleging that “these agreements were intended to keep Actavis UK as the sole supplier of a drug relied on by thousands of patients, and in a position which could allow it to dictate and prolong high prices”.

Actavis was able to maintain its monopoly over the product until November 2015 when another pharmaceutical company entered the market. Concordia eventually began selling the drug in the middle of last year.

It is understood that the watchdog is also investigating both companies in relation to another drug, carbimazole, which treats hyperthyroidism. The medicine rose in price from about £11 a packet to a peak of more than £260 between 2011 and last year.

Actavis had a licence from 2012 but did not begin selling a competing version until June 2014. It has claimed that this was due to problems sourcing the active ingredient.

Both companies face fines of up to 10 per cent of global turnover if the CMA rules against them in its final decision.

The watchdog has already issued a provisional ruling against Actavis in a related inquiry into the pricing of 10mg and 20mg hydrocortisone tablets after they rose by up to 12,500 per cent.

Actavis, previously known as Auden Mckenzie, and Concordia are two of the companies at the centre of a long-running Times investigation into drug prices. Stories have revealed how the businesses were able to use a loophole in NHS rules to increase drug prices after dropping an established brand name. This meant that the drugs were no longer included in a profit cap on branded medicine.

Amit Patel, former owner and managing director of Auden Mckenzie, said there had been no agreement to withhold carbimazole from sale.

A spokesman for Teva, which bought Actavis last year but has since divested the products to an Indian pharmaceutical company called Intas, confirmed that it had received a “statement of objections” from the CMA.

Concordia International said that it believed the supply arrangement with Actavis “did not infringe competition law”. It added that it would review the watchdog’s provisional findings and respond in detail.

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