Supplier collusion pushed drug prices up by 1,800%

posted by Charlie Hart
4 October 2019

Three drug firms have been accused of illegal market sharing that resulted in UK price hikes of up to 1,800% for essential medicines, according to the competition watchdog. 

The Competition and Markets Authority (CMA) alleged pharmaceutical company Aspen unlawfully agreed to pay two other firms, Amilco and Tiofarma, to stay out of the UK market for fludrocortisone acetate tablets.

The agreement “protected Aspen UK’s monopoly” on the drug supply to the NHS, allowing prices to rocket by up to 1,800%, the CMA said.

In a statement of objections, the CMA said its provisional findings were that Tiofarma was made the sole manufacturer of fludrocortisone for direct sale in the UK, while Amilco received 30% of the increased prices Aspen was able to charge under the agreement.

The medicine is used to treat Addison’s disease – a condition that affects the adrenal gland which produces essential hormones such as cortisol and aldosterone. 

In August 2019, Aspen admitted to taking part in the alleged anti-competitive arrangement. 

Once the CMA has concluded its investigation, Aspen has agreed to pay a maximum penalty of £2.1m should the watchdog find there has been an infringement. Tiofarma and Amilco have made no admission.

Aspen has also agreed to pay £8m in compensation to the NHS without the government having to launch court proceedings for damages.

In a stock market statement, Aspen said: “The commitments offered by Aspen and the settlement discussions being undertaken between the CMA and Aspen reflect the group’s willingness to address the concerns raised by competition authorities into alleged anti-competitive conduct by Aspen.”

In May 2019, the CMA alleged four pharmaceutical firms, Alliance, Focus, Lexon and Medreich, had agreed not to compete for the supply of prochlorperazine 3mg dissolvable tablets to the NHS.

Between December 2013 and December 2017, prices paid by the NHS for the drug increased by around 700%, from £6.49 for a pack of 50 tablets to £51.68. 

Separately, the Department of Health and Social Care (DHSC) has restricted exports on 24 drugs which have experienced shortages due to manufacturing issues.

The restrictions will stop medicine wholesalers from ‘parallel exporting’, a process where companies buy medicines meant for UK patients and sell them on for a higher price in another country, potentially causing UK supply problems.

The ban on exports included 19 HRT drugs, used to manage the symptoms of menopause. Five other medicines such as adrenaline auto-injectors and hepatitis B vaccines have been included. 

The DHSC has also introduced serious shortage protocols for the antidepressant fluoxetine, which allows pharmacists to supply an alternative strength or pharmaceutical form to replace dosages that are experiencing shortages. 

The serious shortage protocol will be in place to ease pressure on the supply chain, the DHSC said. The government has said the move is not related to Brexit.

Health and social care secretary Matt Hancock said: “The new measures we’re introducing will help us ensure patients get the medicines they need and the high-quality care they deserve.

Rick Greville, director of supply chain at the Association of the British Pharmaceutical Industry, added: “The decision to take precautionary measures to protect medicines supplies will be very much welcomed by our members.

“It means that these stockpiles of medicines which companies have built over previous months are better protected and available for use only by the NHS patients for which they were intended.”

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