CMA issues over £100m in fines after 1,110% thyroid drug price hike
The CMA has slapped more than £100 million worth of fines on Advanz Pharma, HgCapital and Cinven after it concluded that the price of a thyroid drug was inflated by 1,110%.
The outcome of a Competition and Markets Authority’s (CMA) investigation, published today (July 29), found that Advanz charged an excessive price for its liothyronine tablets, which are used to treat thyroid hormone deficiency.
The CMA found that Advanz inflated the price of its thyroid tablet packs from £20 in 2009 to £248 in 2017, resulting in an increase of 1,110%.
The watchdog also fined HgCapital and Cinven, two private equity firms that were previously owners of the businesses that now form part of Advanz, according to the CMA.
Advanz and Cinven will appeal the decision
The firms the watchdog said were involved in the unfair pricing have been fined a total of over £100 million for the relevant periods in which the CMA said they broke the law.
- Advanz Pharma Corp and three of its subsidiaries were asked to pay a total of £40.9m
- HgCapital was told it owes £8.6m
- Cinven was told its share of the fine amounts to £51.9m.
Price hikes not driven by innovation
The price increases were “not driven by any meaningful innovation or investment, volumes remained broadly stable, and the cost of producing the tablets did not increase significantly”, the CMA said.
Advanz’s liothyronine tablets were placed on the NHS drop list in July 2015, which meant some patients faced the prospect “of having their current treatment stopped” or having to pay for the tablets themselves, the CMA added.
The CMA said this was achieved "because liothyronine tablets were among a number of drugs that, although genericised, faced limited or no competition and therefore could sustain repeated price increases".
A “huge” cost to the NHS
Andrea Coscelli, chief executive of the CMA, said this case sends a clear message.
“Advanz’s decision to rachet up the price of liothyronine tablets and impose excessive and unfair prices for over eight years came at a huge cost to the NHS, and ultimately to UK taxpayers,” Mr Coscelli said.
“But that wasn’t all – it also meant that people dealing with depression and extreme fatigue, as a result of their thyroid conditions, were told they could not continue to receive the most effective treatment for them due to its increased price,” he continued.
He added: “Advanz’s strategy exploited a loophole enabling it to reap much higher profits. This fine of over £100m, and our work in the pharma sector to date, sends a clear message that breaking the law has serious consequences.”
On their part, Advanz said it disagrees with the CMA’s decision.
“Advanz Pharma takes competition law very seriously. We utterly disagree with the CMA’s decision on the pricing of liothyronine tablets and will be appealing,” a spokesperson told C+D today.
"At all times, Advanz Pharma acted in the interest of patients, investing significantly to keep this medicine on the market to the specifications required by the Medicines and Healthcare products Regulatory Agency. In addition, any liothyronine price increases were all pre-notified to, and agreed in advance and in writing by, the Department of Health and Social Care,” they claimed.
Similarly, Cinven said it will be appealing the CMA’s decision.
“The Fifth Cinven Fund was a majority investor in AMCo for three-and-a-half years out of the eight-and-a-half years considered by the CMA Infringement Decision. It completed the sale of AMCo to Concordia (now Advanz Pharma) in 2015,” a spokesperson told C+D today.
“Cinven is named under the principle of parental liability only as a former parent of AMCo and does not believe that any Cinven entity broke the law. Cinven strongly disagrees with the CMA’s findings and will be appealing the CMA’s decision,” they continued.