The British market regulator said in a statement that the firms have ramped up prices by up to 27 times in the UK for phenytoin sodium capsules, an anti-epilepsy drug used by 50,000 patients in the UK, breaching UK and EU competition law.
Pfizer manufactures the capsules and supplies Flynn Pharma, which then distributes them to UK wholesalers and pharmacies. The objections are against both companies, with concerns over prices Pfizer charged Flynn Pharma and then the prices Flynn Pharma has charged to customers, since September 2012.
Prior to 2012, the CMA statement says, Pfizer sold the medication to wholesalers and pharmacies under the brand name Epanutin®. When the rights were sold to Flynn Pharma, Pfizer continued to manufacture the drug but sold it to Flynn at prices far higher than it had previously sold them under Epanutin®.
Flynn Pharma then sold the drug at prices 25 to 27 higher than those historically charged by Pfizer. The NHS was one casualty, spending £2.3m on phenytoin sodium capsules annually prior to September 2012, which skyrocketed to just over £50m in 2013 and over £40m in 2014.
Ann Pope, CMA Senior Director of Antitrust Enforcement, 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’s findings on dominance and abuse are provisional and no conclusion can be drawn at this stage that there has, in fact, been any breach of competition law.
The CMA can impose a financial penalty of 10 per cent of annual worldwide group turnover.
Pfizer said in a statement:
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. Pfizer is co-operating fully with the CMA's ongoing investigation.