Drug firm collusion hiked medicine price by 700%, says CMA

Four drug companies colluded to push up the price of an anti nausea drug, according to provisional findings by the competition watchdog.

The Competition and Markets Authority (CMA) alleges that Alliance, Focus, Lexon and Medreich agreed not to compete for the supply of prescription-only Prochlorperazine 3mg dissolvable tablets to the NHS.

The CMA said between December 2013 and December 2017 prices paid by the NHS for the drug rocketed by around 700%, from £6.49 for a pack of 50 tablets to £51.68. Between 2014 and 2018 costs incurred by the NHS for the drug shot up from around £2.7m to around £7.5m, even though the number of packs dispensed fell.

The CMA’s provisional findings are that Alliance agreed to supply Prochlorperazine exclusively to Focus, who then paid Lexon a share of the profits it earned from the drug’s sales. Lexon then shared these payments with Medreich.

Before entering this arrangement, Lexon and Medreich had been taking steps to launch their own jointly-developed Prochlorperazine. Medreich obtained a licence to supply the drug in January 2014 but did not do so until November 2017.

Ann Pope, CMA senior director of antitrust, said: “Agreements where a company pays a rival not to enter the market can lead to higher prices and deprive the NHS of huge savings that often result from competition between drug suppliers.

“The NHS should not be denied the opportunity of benefitting from an increased choice of suppliers, or lower prices, for important medicine.”

The companies now have an opportunity to make representations to the CMA before it reaches a final decision.

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