Actavis UK accused of 12,000% hydrocortisone price hike
A government watchdog has alleged that Actavis UK has broken competition law by "excessively" overcharging the NHS for hydrocortisone tablets.
In its provisional findings of an investigation into the “excessive and unfair” pricing, the Competition and Markets Authority (CMA) found the UK pharmaceutical company increased the price of packs of 10mg hydrocortisone tablets by over 12,000% in eight years.
The drug was manufactured by Auden Mckenzie from June 2008, until Actavis UK acquired the company in January 2015.
The amount the NHS was charged for 10mg packs of hydrocortisone tablets rose from 70p in April 2008 to £88 per pack by March 2016, the CMA said in a statement today (December 16).
The CMA stressed that its findings are “provisional” and “no conclusion should be drawn at this stage” that Actavis UK has indeed breached competition law.
A statement of objections has been sent to both Actavis UK and parent company Allergan – which were both acquired by pharmaceutical company Teva in August, as part of its buyout of UK manufacturing company Actavis Generics.
The statement of objections “gives parties notice of a proposed infringement decision” and allows the accused time to respond, the CMA said, and “does not necessarily lead to an infringement decision”.
In a statement on behalf of Actavis UK, Teva said it is reviewing the CMA’s allegations and “intends to defend” them.
“Although Actavis UK was recently acquired by Teva through the acquisition of Actavis Generics, it is in the process of being divested to Intas Pharmaceuticals Limited and has never in practice been controlled by Teva,” it said.
It added that while the pricing of hydrocortisone tablets was “never under Teva’s effective control…Teva believes that intervention by the CMA in prices for generic medicines raises serious policy concerns regarding the roles of both the CMA and the Department of Health".
Hydrocortisone tablets – which are the primary replacement therapy for patients with adrenal insufficiency and are commonly used as an emergency treatment for severe bronchial asthma, drug hypersensitivity reactions and serum sickness – are sold in two different strengths in the UK.
The CMA’s investigation is looking at the pricing of both the 10mg and 20mg packs, the watchdog said.
It alleges that the 9,500% increase in the price of 20mg hydrocortisone tablets meant the NHS was charged £102.74 per pack by March 2016.
Prior to April 2008, a branded version of hydrocortisone tablets was sold by a different company, the CMA said.
During this time, the NHS spent approximately £522,000 a year on the drug. But by 2015, NHS spend on the tablets had risen to £70 million a year, it added.
Andrew Groves, senior responsible officer in the CMA’s investigation said: “This is a lifesaving drug relied on by thousands of patients, which the NHS has no choice but to continue purchasing.
“We allege that the company has taken advantage of this situation and the removal of the drug from price regulation, leaving the NHS – and ultimately the taxpayer – footing the bill for the substantial price rises.”
Last week, the CMA imposed a "record" £84.2m fine on Pfizer, and a £5.2m fine on Flynn Pharma for their parts in charging “excessive and unfair” prices in the UK for epilepsy drug phenytoin sodium.
The CMA confirmed it is still investigating three other cases of drug pricing in the UK.