[Ip-health] FT: UK watchdog accuses Pfizer of inflating anti-epilepsy drug price

Thiru Balasubramaniam thiru at keionline.org
Thu Aug 6 05:17:34 PDT 2015


August 6, 2015 1:03 pm

UK watchdog accuses Pfizer of inflating anti-epilepsy drug price

Andrew Ward, Pharmaceuticals Correspondent

Pfizer has been accused by the UK’s competition watchdog of abusing its
dominant position in the supply of an anti-epilepsy medicine and inflating
the NHS drugs bill by tens of millions of pounds.

The Competition and Markets Authority said it had reached a provisional
view that Pfizer and its UK partner, Flynn Pharma, had charged “excessive
and unfair prices” for phenytoin sodium capsules in breach of UK and EU
competition law.

The ruling adds to mounting pressure on the pharmaceuticals industry over
the price of medicines in the UK at a time when the NHS is struggling with
rising costs.

US-based Pfizer, one of the world’s biggest pharmaceuticals groups, sold
the UK distribution rights for phenytoin sodium capsules to Flynn, a
privately owned Herefordshire company, in 2012.

Pfizer continued to manufacture the drug and, according to the CMA,
supplied it to Flynn at prices between 8 and 17 times higher than the US
company had previously charged for the product in the UK.

Flynn then sold the drug to customers at prices between 25 and 27 times
higher than those historically charged by Pfizer for a drug used by 50,000
UK patients.

This led to an increase in the amount spent annually by the NHS on
phenytoin sodium capsules from £2.3m before 2012 to just over £50m in 2013.

Ann Pope, senior director of antitrust enforcement at the CMA,

said: “While businesses are generally free to set prices as they see fit,
those that hold a dominant position have a special responsibility to ensure
that their conduct does not impair genuine competition and that their
prices are not excessive and unfair.

“The prices that the CMA is concerned about in this case are very high
compared to those prices previously charged and have led to a big increase
in the total NHS drug bill for what is a very important drug for tens of
thousands of patients.”

The CMA said it would consider representations from Pfizer and Flynn before
making a final decision on whether the law had been infringed. The agency
has the power to fine companies up to 10 per cent of annual worldwide group

Pfizer said it was fully co-operating with the investigation. “Ensuring a
sustainable supply of our products to UK patients is of paramount
importance to Pfizer and was at the heart of our decision to divest the
product,” the company said. Flynn said it intended to “vigorously defend”
itself against the allegations.

A person familiar with Pfizer’s argument said that phenytoin sodium
capsules — previously marketed as Epanutin — were making a loss before the
brand was sold to Flynn. In the absence of price rises, the product was at
risk of being withdrawn from the market, this person said. This would have
forced the NHS to switch to a more expensive alternative product.

Pharmaceuticals industry officials warned investigations by the CMA into
drug pricing would increase legal uncertainty for companies whose pricing
is already regulated by the Department of Health.

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