The Competition Appeal Tribunal (CAT) has upheld a “fair and proportionate” £2.8 million fine against hydrocortisone manufacturer Accord-UK levied by the Competition and Markets Authority (CMA), the competition watchdog announced yesterday (April 29).
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, the CMA found that the NHS had been charged “excessively high prices” between 2008 and 2017 for 20mg hydrocortisone tablets and between 2008 and 2018 for 10mg hydrocortisone tablets.
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Auden/Actavis increased the prices of 10mg and 20mg hydrocortisone tablets by more than 10,000% over the course of almost a decade compared to their branded version, netting them “at least” £145m in “illegal profit”, the CMA found at the time.
In September, the CAT upheld the CMA’s findings against the manufacturer for “abuse of dominance” and imposed fines worth “almost £130m” following an appeal.
“Bought off”
But the CMA had imposed this particular fine of £2.8m – upheld unanimously by the CAT yesterday - for a “market sharing agreement” between Auden and its competitor Waymade, it said.
Under this “illegal” agreement, Auden paid Waymade “substantial monthly payments” to keep it from producing 20mg hydrocortisone tablets between 2011 and 2015, it added.
The CMA said that Auden had “bought off” its competitor so that it could “maintain its monopoly position” and continue to “increase prices”.
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Accord-UK was determined to be liable for Auden Mckenzie’s conduct before 2015 and therefore solely liable for the £2.8m penalty relating to the 20mg market sharing agreement, it added.
While Waymade paid its own £2.2m fine for the market sharing agreement, Accord-UK had appealed the manner by which the CMA decided the fine levied against it.
“Serious nature”
The CMA’s interim executive director of competition enforcement Juliette Enser yesterday said that the CAT’s decision to uphold the penalty in full had recognised “the serious nature of the market sharing agreement”.
Enser described hydrocortisone 20mg as a “life-saving drug” used by thousands of people for the treatment of Addison’s disease, among other conditions.
Accord told C+D that it “cannot make a statement at this time” as it is an “ongoing legal process”.
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In 2021, the CMA found that Auden/Actavis had also paid another competitor, AMCo (now known as Advanz Pharma), to keep it from producing hydrocortisone 10mg tablets between 2012 and 2016.
But in March, the CAT decided to “overturn nearly £100m of fines” imposed by the CMA in 2021 for the market sharing agreement between Auden/Actavis UK and competitor AMCo/Advanz.
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The CMA said at the time that the decision was founded on “a fundamentally misconceived procedural point” that “overlooks critical evidence”.
It is currently seeking leave to appeal the CAT’s March decision from the Court of Appeal, according to its announcement.
