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ABPI welcomes investigation into 'excessive' NHS drug prices

The CMA has the power to fine any companies that have broken the law up to 10% of their turnover

Drug manufacturers have welcomed a government investigation into “unfair" medicines prices, following a newspaper exposé.

The Competition and Markets Authority (CMA) is investigating "companies" for “suspected unfair pricing” of drugs, including those sold to the NHS.

The watchdog was urged to launch an investigation by the health secretary Jeremy Hunt, following an exposé in The Times in June that accused four companies of exploiting a loophole to hike prices – for off-patent medicines such as antidepressant Sinepin and insomnia drug Welldorm – in some cases by more than 10,000%.

The CMA confirmed last month (October 25) that it is exploring “suspected breaches of competition law in the pharmaceutical sector”.

The Association of the British Pharmaceutical Industry (ABPI) told C+D yesterday (November 7) that it “condemns” price rises by “some small operators”.

“We support the ability of [the] government to question these if they occur,” the ABPI added.

ABPI executive director commercial Dr Richard Torbett described attempts to hike prices in the industry as “cynical and exploitative” when The Times published its investigation in June.

Companies unknown

The CMA did not name the companies under scrutiny or make any reference to The Times article.

However, Concordia International Corporation released a statement on the day the CMA launched its investigation, confirming that its international arm of the business, which includes the UK market, was part of the inquiry.

Concordia owns AMCo, a company formed by the merger of Amdipharm and Mercury, two of the businesses that The Times alleged in June are “behind major price increases”.

In its statement, Concordia said: “The CMA's investigation includes matters that pre-date Concordia's ownership of the [international arm of the business].

“We are working cooperatively to better understand the CMA's position, and will continue to work constructively to resolve the matter.”

The pharmaceutical company emphasised that the CMA “has not reached a view as to whether there is sufficient evidence of any infringement for it to issue a statement of objections”.

A spokesperson for Atnahs, one of the other companies named by The Times, told C+D today (November 8) that it has not been made aware of any investigation into its conduct.

The fourth company named by The Times, Auden Mckenzie, is now owned by Teva, one of the largest generic drug manufacturers in the world. Teva declined to comment when approached by C+D.

The CMA said it will decide in February 2017 whether or not to proceed with, or close, its investigation. Not all cases result in an infringement of the law, the CMA said.

The watchdog has the power to fine any companies that have broken the law up to 10% of their turnover, according to Office of Fair Trading rules.

18 Comments
Question: 
Are you aware of any 'excessive' drug pricing?

Jaz Kaur, Pharmacy

Oh, and what about the additional claims for re-imbursement by Boots ,and others, suggesting special delivery charges etc etc, ?????

Jupo Patel, Production & Technical

No idea. Perhap ask the editor to investigate?

Jaz Kaur, Pharmacy

Think PPA should take a look into it ( if they dare ).    

Ben Merriman, Community pharmacist

This wasn't exposed in June!  It was front page of the Sunday Times back in November of last year.  Why has DH not done anything until now? 

On a positive note, there are plans to block this activity through an NHS bill which is currently being drafted.  The NHS spends around a quarter of a billion pounds on these medicines more than they need to (compared to the originator product), money that could be spent on keeping pharmacies open!

Jupo Patel, Production & Technical

You mean used to maintain the flow of taxpayer money into contractors pockets.

Ben Merriman, Community pharmacist

No.  The reimbursement price pharmacies are paid is set by DH who in turn get the price from suppliers and wholesalers.  Because there is only one manufacturer, they can effectively charge what they like as there is no competition.  No pharmacy is able to exploit this system as they have no say in either the reimbursement price paid, nor the price the manufacturer charges.  In actual fact, pharmacies will end up losing money from dispensing some of these products as around 11% will be clawed back despite only getting 0.1% discount from one of the manufacturers concerned. 

Jupo Patel, Production & Technical

NP8 scheme? Discuss

Jupo Patel, Production & Technical

Whole sector riddled with fraud and corruption. I wonder if the NHS is still being charged £100s for simple linctus. Has the editor ever looked into these dodgy practices.

Sharon Stone, Communications

Yes they don't want to upset the "big boys " do they , any whiff of corruption etc everyone looks the other way. Bloody scandal.

Jupo Patel, Production & Technical

The silence will be deafening. The demise of community pharmacy is almost warranted.

Ben Merriman, Community pharmacist

The companies involved are hardly "big boys" - Auden McKenzie aside (now owned by Teva), the companies concerned are exploiting a loophole in NHS pricing regulations and taking advantage of their market position. These companies do not contribute to R&D in new medicines!

Jupo Patel, Production & Technical

Good idea. Don't bother investigating fraud if the perpertrators are not big companies. Better to concentrate on the big boys like B**ts? But oh hang on a minute........ 

Ben Merriman, Community pharmacist

They are being investigated.  That's the point of this article!  I was replying to the comment above.  

Jupo Patel, Production & Technical

Let me know me know the findings once they're pubished.

Ben Merriman, Community pharmacist

Given the time and effort I've invested in trying to get this practice publicly known, I'd be more than happy to!  However, I'm sure the lovely people at C&D will be all over it too.

N O, Pharmaceutical Adviser

How can pharmacies up the prices of medicines, which are re-imbursed at DT prices??

Jupo Patel, Production & Technical

NP8 scam ?

Valentine Trodd, Community pharmacist

Oh Lord... by the time this news filters down to the man on the street, it'll be about pharmacies jacking up the price of meds!

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