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Actavis UK accused of 12,000% hydrocortisone price hike

Speaking on behalf of Actavis UK, parent company Teva said it intends to defend the allegations

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.

7 Comments
Question: 
Have you noticed the price of debranded drugs increase in recent years?

Really? Wow, Superintendent Pharmacist

The reason they were so (artificially) cheap before is due to PPRS.

PPRS is basically a horse trade where the company goes to the government and says I have drug x and drug y.

They then do a deal where they will reduce the cost of drug x in order to get drug y approved. Drug x might be a new BP medicine that proabably won't be a huge seller, and drug y is a £30k per month cancer medicine.

If you could tell me who is price gouging in this situation, I would love to know.

Additionally, PPRS actually creates this situation, as if, for example, Merck were allowed to raise the price of Hydrocortone from 70p, to say even £5 or £10, they would probably have continued to make it themselves, however, it is plainly not viable at that price for such a low volume product.

Finally, as a taxpayer, I would be far more upset that our foreign aid budget of £12.2 BILLION is being wasted on african girl groups and bosses of charities on £600k per year that are government funded.

Just in case people are not aware, the total community pharmacy budget is now £2.63 billion.

 

Jupo Patel, Production & Technical

Just in case you didn't know foreign aid is bribery for contracts for arms, medicines etc.... The country giving 'aid' always get much more coming back their way(In this case the UK). This so called 'aid' also comes with terrible conditions designed to paralyse the recepient and keep them in a state where there continually need this 'aid'.  So you don't need to worry about that £12.2bn.

Jupo Patel, Production & Technical

Corruption runs deep. Nothing will happen though. At the very most a token fine.

 

Really? Wow, Superintendent Pharmacist

 

I find these claims by the CMA over the pricing of generic medicines are quite probably anti-competitive. 

The medicines are concerned are all generic, thus could be made by anyone. If there was scope for another manufacturer to enter the market profitably, then why would they not?

When are they going to challenge the position of Mercury who have 0.4% discount, so are not ZD and subject to clawback, and we dispense at a loss?

Surely this is more market abuse than a producer of a generic medicine?

Ben Merriman, Community pharmacist

Mercury (and AmCo, Amdipharm and Focus, all part of the Concordia group) do do this debranding.  They make the likes of fusidic acid eye drops, liothyronine tablets, trifluoperazine tablets/liquid, gentaamicin/hydrocortisone ear drops, etc, which have all been discontinued as a branded/proprietary medicine and immediately replaced by a seemingly identical generic product with prices often several times higher.  This activity is estimated to cost the NHS something like a quarter of a billion pounds a year, easily enough to pay for a properly funded, efficient community pharmacy service.  

Really? Wow, Superintendent Pharmacist

I still believe that we have a generic market that is open, and if there was scope to manufacture these products by other manufacturers, then they would at the drop of a hat. Surely you would much rather manufacture liothyronine at £258 than Bendro at 10p.... if it was viable. 

I am not defending AmCo, but in the UK we have a belief that everything in medicine is free/cheap. 

If we are going to talk about corruption, the PPRS is essentially a smoke and mirrors, behind closed doors price fixing. Large pharma do 'deals' to get their products 'approved' and if they make too much money, have to give some back. 

We all love our market economy and espouse its virtues, except when it costs a bit more than we think it should. 

Back to AmCo... I wonder what deal that they have done with the government to not make their products ZD? Does that not smack of corruption? Next time you dispense Fusidic Acid ED and pay the government £3 for the pleasure or Liothyronine £25. 

That is an issue that we should be getting exercised about!

Ben Merriman, Community pharmacist

The issue I and every other tax payer should be angry about is that fact that these medicines used to cost a fraction of the price.  This behaviour costs the NHS something like £250m a year.  £250m that is not just lying own the back of the sofa but could be used to fund desperately needed services in the areas we work and live.  Like child and adolescent health services in South Cumbria or consultant led maternity services in North Cumbria. 

Liothyronine used to cost something like £15 for 100 and are now £258 for 28.  Fusidic acid e/d are over ten times what they used to cost.  Alimemazine, dicycloverine, trimipramine, doxepin, nefopam, the lit goes on and on and on...

What is the reason for this increase in price?  Has there been an increase in raw ingredient cost?  Is there an incredibly low yield meaning a disproportionately high cost of manufacture?  Or has a company found a loophole in NHS pricing tht allows them to "price gouge" and charge unacceptably high prices for what should be cheap drugs?

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