United Kingdom - CMA Consulting on Proposed Commitments from Essential Pharma to Keep Bipolar Medicine on Market at Affordable Prices
- 24/11/2020
- Articles
Early last month, the Competition and Markets Authority (CMA) started an investigation into Essential Pharma because of suspicions that the firm might have abused an allegedly dominant position by taking steps to withdraw Priadel® from the UK market. This is a lithium based medicine indicated for the first line treatment of bipolar disorder and other mental conditions (see, Van Bael & Bellis Life Sciences News Alert, 7 October 2020).
The accusation against Essential Pharma was that it had sought “unjustifiably high prices” for its supplies of lithium carbonate medicines, either by securing a price increase for Priadel® or by preparing a switch of specific patients to another and more expensive Essential Pharma medicine, Camcolit®, following the withdrawal of Priadel® from the market. Backed by opinions of relevant health authorities, the CMA had also expressed concern over a possible switch for medical reasons.
Faced with the CMA’s objections, Essential Pharma took the decision to keep Priadel® on the market and start pricing discussions with the Department of Health and Social Care (DHSC) which resulted in an agreement on 5 November 2020. Essential Pharma then also offered commitments to the CMA which has now decided to submit these to a market test (the proposed commitments) (see, attached press release and Notice of intention to accept commitments).
The CMA reached the provisional view that the proposed commitments, if implemented, would address its competition concerns. This is because they will cause Essential Pharma to continue supplying the UK market with Priadel® for a period of 5 years on terms sanctioned by the DHSC. According to the CMA, Essential Pharma’s supply promise will place the DHSC in a better position to resist any unsubstantiated requests for a price increase. At the same time, patients will have security of supply and peace of mind for at least 5 more years.
Interestingly, the CMA is also of the opinion that its accepting the proposed commitments will enhance compliance. According to the CMA, Essential Pharma’s about-face in maintaining Priadel® on the market and its commitment to supply the medicine for 5 more years “send a strong signal to other businesses, deterring them from engaging in practices which may be anti-competitive” (Notice of intention, para. 6.12). While this may be true, the CMA also acknowledges that its possible decision to accept commitments “will not include any statement as to whether Essential Pharma infringed competition law” (Notice of intention, para. 6.2).
