UK CMA continues crack down on excessive pricing of medicines
On 29 July 2021, the UK Competition and Markets Authority (“CMA”) imposed fines totalling more than £101 million on Advanz Pharma and previous owners, Cinven and HgCapital, for charging excessive and unfair prices for liothyronine tablets – a treatment for hypothyroidism (see Press Release). In line with most recent excessive pricing cases, this new decision concerns a drastic increase in the price of a genericised medicine that could not be justified by increased costs, investments or innovation.
During its investigation, the CMA uncovered Advanz’s strategy of identifying genericised medicines subject to no (or limited) competition and substantial barriers to new entry. After acquiring the rights to such medicines, Advanz would “de-brand” the medicines in order to avoid applicable price regulations.
Using this strategy, Advanz Pharma was able to increase the price of liothyronine tablets by more than 6,000% between 2009 and 2017. As a result, NHS spending on liothyronine tablets increased from approximately £2.3 million in 2009 to above £30 million in 2016. Liothyronine tablets were ultimately placed on the NHS “drop list”, leaving patients with the option of either ceasing use of the treatment or having to purchase the treatment at their own expense.
This new decision by the CMA follows hot on the heels of its £260 million fine on Auden Mckenzie and Actavis (now Accord-UK) for charging excessive prices and concluding anticompetitive market sharing agreements in relation to the supply of hydrocortisone tablets (for further information see our previous updates: (1) CMA fines hydrocortisone tablet suppliers over GBP 260 million; and (2) Analysis – New Excessive Pricing Cases in the UK and NL – Major Developments or More of the Same?).