For Britain's competition watchdog has slapped Pfizer and Flynn Pharma with nearly £90m worth of fines for charging excessive prices to the NHS for an anti-epilepsy drug. It found the cost had been ramped up by as much as 2,600 per cent after the drug was deliberately debranded in 2012.
The Competition and Markets Authority (CMA) imposed a record £84.2m fine on the pharmaceutical manufacturer Pfizer and a £5.2m fine on distributor Flynn Pharma after finding they broke competition law.
The duo had charged "excessive and unfair" prices in the UK for phenytoin sodium capsules, an anti-epilepsy drug, so the CMA has also ordered them to reduce their prices.
NHS spending on the capsules had rocketed from £2m a year in 2012 to about £50m the following year. UK prices for the drug were many times higher than in Europe, the CMA had said.
Philip Marsden, chairman of the case decision group for the CMA's investigation, 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."
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Flynn Pharma was also charged £5.2m for its role in hiking prices of phenytoin sodium capsules in 2012.
Pfizer claimed the drug was loss-making before it was debranded, but the CMA said it had calculated that according to the drug giant's figures, all such losses would have been recovered within two months of the price rises.
In a statement the drug giant said it "refutes the findings set out in the CMA 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.
"Against that background, Pfizer believes the CMA's findings are wrong in fact and law and will be appealing all aspects of the decision."
Flynn said it was "disappointed" by the decision which it said was "based on a wholly flawed understanding of the UK pharmaceutical market".
"We believe that left unchallenged, the CMA's decision today would stunt investment in generics, eventually leading to a reduction in supply and less choice for doctors and patients," said Flynn Pharma's chief executive David Fakes. "It is a matter of common interest for us to appeal and see this decision overturned."
The firm is preparing its appeal.