Actavis brokered deal to maintain high hydrocortisone prices
A government watchdog has alleged that manufacturers Actavis UK and Concordia worked together to artificially maintain an inflated price for hydrocortisone tablets.
According to a Competition and Markets Authority (CMA) investigation, between January 2013 and June 2016 the two companies agreed that Concordia (formerly Amdipharm) would not enter the market with its own version of hydrocortisone tablets.
In exchange, Concordia received a fixed supply of Actavis UK’s 10mg tablets at a “very low price”, which it then resold to customers in the UK, the CMA alleged in a statement last Friday (March 3).
Actavis UK remained the “sole supplier” of hydrocortisone tablets from 2008-15, said the CMA, which noted that the cost of these tablets to the NHS rose from £49 in 2013 to £88 in 2016.
The watchdog "provisionally" found that both companies broke competition law by entering into "these anti-competitive agreements", and confirmed it has sent both parties a statement of objections.
The CMA alleged the agreements "enabled Actavis UK to prolong the high [drug] prices in the market" and “deprived the NHS of the significant price falls that would be expected to result from true competition”.
However, the watchdog stressed that these are “provisional findings” and “no conclusion should be drawn at this stage”.
Manufacturers' response
In response to the allegations, Concordia said “the supply arrangement” between the companies “was not in breach of competition law”.
“We will review the CMA's provisional position…and then intend to respond in detail to it,” it added.
The manufacturer – which acquired Amdipharm in October 2015 – pointed out that the CMA's statement of objections “includes matters that pre-date Concordia's ownership of [Amdipharm]".
In a statement on behalf of Actavis UK, Teva – which acquired the generics company in August 2016 – confirmed that Actavis UK has been accused of anti-competitive conduct.
“Although Actavis UK was acquired by Teva in August 2016, it has subsequently been divested to Accord Healthcare Limited (a subsidiary of Intas Pharmaceuticals Limited) and has never in practice been controlled by Teva,” it said.
Both companies have until May 2017 to respond to the statement of objections.
The CMA can fine any business that infringes competition law up to 10% of its annual worldwide group turnover.
Other drug pricing investigations
- Concordia revealed in October that its international arm was part of a CMA inquiry into “unfair” medicine pricing.
- In a separate investigation last December, the CMA accused Actavis UK of overcharging the NHS for hydrocortisone, after the price increased by 12,000% in the space of eight years.
- The same month, manufacturer Pfizer and distributor Flynn Pharma were forced to pay a total of almost £90 million for charging excessive prices for anti-epilepsy drug phenytoin sodium.
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