Over the past two weeks, the competition authorities for the UK (“CMA”) and the Netherlands (“ACM”) have imposed significant fines for unlawful excessive pricing of medicines, accelerating the recent trend in Europe of pharmaceutical companies facing prosecution and sanctions for significant price increases. Background On 15 July 2021, the UK CMA imposed fines of £155 million on Accord-UK (previously Auden Mckenzie / Actavis) for price increases of more than 10,000% on hydrocortisone tablets after they were de-branded and fell outside the UK NHS price regulations. The CMA also imposed additional fines of £111.5 million for cartel agreements entered into when other parties threatened to enter the market. On 20 July 2021, the NL ACM imposed fines of approximately €20 million on Leadiant Biosciences for charging higher prices on chenodeoxycholic acid (CDCA) after it successfully received orphan medicine status and regulatory exclusivity. On 29 July 2021, the UK CMA imposed fines of over £100 million on Advanz and its private equity owners (HgCapital and Cinven) for price increases of more than 6000% on liothyronine tablets. New Developments or More of the Same? NEW – Prosecution of excessive pricing during regulatory exclusivity. While past excessive pricing cases, as well as the two new cases in the UK, all involve products for which any patent or regulatory exclusivity had expired, the case in the Netherlands concerns the pricing of a product for which Leadiant held valid regulatory exclusivity under the orphan drugs regulations. While the Dutch competition authority took pains to emphasize that any innovation by Leadiant was minimal (as CDCA was previously available for many years), this case nevertheless represents an additional step by competition authorities, demonstrating that they are also willing to prosecute strategies involving large price increases and limited innovation. NEW - Highest ever fines. The fines issued in these cases are the highest fines ever imposed on pharmaceutical companies by the UK and Dutch competition authorities, indicating that the authorities in these countries consider such excessive pricing to be as serious an infringement as cartel conduct. NEW – Specific requirements when negotiating prices. The Dutch decision includes the legal standard the ACM expects to be met by dominant pharmaceutical companies when negotiating prices. Specifically, such companies have a responsibility of “active engagement” and to negotiate “effectively and seriously” with health insurers and other relevant public authorities, and ultimately “not to charge and collect an excessive price”. NEW - 1800% and 250% price increases allowed? In the case in the Netherlands, the price of CDCA increased from €46 to €14,000. However, only Leadiant’s last price increase (of 350% in 2017) was held to be an infringement, while Leadiant’s prior price increases of 1800% in 2009 and 250% in 2014 were not sanctioned. Potential explanations are that Leadiant was not dominant before receiving exclusivity in 2017 or that Leadiant’s prior price increases were justified by the costs it incurred to gain regulatory approval. SAME - Compliance with regulations is not an infringement, but it is also not a valid defense. The ACM does not allege that Leadiant unlawfully obtained an orphan designation for CDCA, or that the necessary price increase to cover the costs for the registration is unlawful. However, the ACM also does not appear to accept that Leadiant’s compliance with the orphan regulations and the associated “reward” of regulatory exclusivity empower Leadiant to freely set its prices in its discretion, and does not justify the last 350% price increase implemented in 2017. SAME – Comparisons with prices in other countries is also not a valid defense. Consistent with the approach of the European Commission and Italy in the Aspen case, the ACM did not appear to accept Leadiant’s argument that the list price set it the Netherlands is “the lowest in the EU” as a defense against a finding of excessive pricing. NEW – Authorities not deterred by losses in prior cases. The UK CMA’s prior high-profile case against Pfizer and Flynn for excessive pricing of phenytoin sodium capsules was annulled on appeal. Despite this high profile rebuke – with the CMA being criticised for, among other things, misapplying the legal test for excessive pricing and failing to properly evaluate evidence adduced by the parties – the CMA and ACM appear undeterred in the pursuit of cases involving significant price increases on medicines.