The CAT judgement has levied fines worth “almost £130 million”, as it “unanimously upheld” the CMA’s findings against the manufacturers for “abuse of dominance”, the competition watchdog announced yesterday (September 18).

The CMA said that these fines were the “highest ever” penalties upheld by the CAT, even after the tribunal reduced penalties against one of the companies involved by £26m.

Read more: Accord vows to appeal CMA case on 10,000% hydrocortisone price hiking

In July 2021, the CMA issued more than £260m in fines against hydrocortisone manufacturers Auden Mckenzie and Actavis UK – which took over the Auden business in 2015 and is now known as Accord-UK – as well as their parent companies and potential competitors for “abuse of dominance” and “collusion”. 

At the time, Accord said that the case against the company was “flawed legally” and that it would appeal the ruling.

A spokesperson told C+D today (September 19) that the manufacturer is "very disappointed" in the CAT's decision to reject its appeal and is "considering all options available".

10,000% price hike and competitor pay-offs

The CMA found in 2021 that the firms “exploited the fact that de-branded drugs are not subject to NHS price regulation” and increased the price of 10mg and 20mg hydrocortisone tablets by “over 10,000%” compared to the original branded version. 

Between April 2008 and March 2016, the price paid by the NHS for a pack of 10mg tablets rose from 70p to £72, netting Auden/Actavis “at least” £145m in “illegal profit”.

The CMA also found that Auden had paid potential competitor Waymade a monthly sum not to enter the market with its own versions of hydrocortisone tablets and that Auden and later Actavis UK had also “colluded with another potential competitor” AMCo – now known as Advanz Pharma - to “buy off” competition.

Read more: Actavis brokered deal to maintain high hydrocortisone prices

The appeal ruling delivered yesterday dealt only with the “abuse of dominance” findings, which accounted for £155.2m of the total fines levied by the CMA.

The CAT said that it had “reached the same outcome” as the CMA and upheld the finding that there was “no justification” for the price hikes.

While upholding the CMA’s findings on “excessive and unfair” pricing, the CAT decided to reduce the penalties imposed on former Auden parent company Allergan, with the precise amount “to be determined in a further order”, the watchdog said.

The CAT upheld the CMA’s penalties in all other respects, although it “reserved its judgement” on the CMA’s collusion findings, it added.

“Shocking”

According to the CMA, the judgements handed down against the manufacturers “pave the way for the NHS to seek compensation” for the “hundreds of millions of pounds” that it spent on the price-inflated drugs.

Michael Grenfell, executive director of enforcement at the CMA, said that the ruling was “another important step forward” in the authority’s actions against “abuse of the NHS”.

Read more: Actavis UK accused of 12,000% hydrocortisone price hike

The “shocking” infringements were “some of the most serious abuses [the CMA] had uncovered in recent years”, he added.

Annual NHS spending on hydrocortisone – which is relied on by tens of thousands of people to treat life-threatening conditions - rose from around £0.5m to more than £80m, he said. 

Accord: "Very disappointed"

"We are still digesting the judgment and considering all options available to Accord Healthcare," they added, saying that the manufacturer will not "let this decision distract" it from its "mission to provide affordable medicine to the NHS and patients”.

“Accord is proud to be a leading supplier to the NHS, providing over 250 million packs of medicines every year at an average price of around £1 per pack, less than a bottle of water, and saving the NHS hundreds of millions if not billions of pounds every year," the spokesperson said.

Exploiting the NHS

In December 2016, C+D first reported on the “excessive and unfair” pricing of hydrocortisone, after the CMA made provisional findings against Auden Mckenzie and Actavis UK, which, it said, had increased the price of packs of 10mg hydrocortisone tablets by over 12,000% in eight years.

Then in March 2017, C+D reported that the CMA had found that Actavis UK and Concordia (now Advanz Pharma) had worked together to artificially maintain an inflated price for hydrocortisone tablets.

Read more: ‘Abused dominant position': Appeal sees liothyronine manufacturer fined £41m

The case comes as the CAT last month quashed an appeal by Advanz Pharma, Cinven and HgCapital against the market watchdog’s findings on “excessive” pricing of thyroid hormone deficiency treatment liothyronine. 

The CAT found that Advanz and its former owners HgCapital and Cinven were liable for fines totalling £84.2 million – and of this, Advanz must pay £40.9m, Cinven £37.1m and HgCapital £6.2m.