In a statement of objections issued today (July 25), the Competition and Markets Authority (CMA) alleged that manufacturers Morningside and AMCo (now Advanz) and wholesaler Alliance Healthcare broke competition law by “arranging to carve up the market between them”.
The CMA alleged the companies agreed Alliance Healthcare would buy equal volumes of the antibiotic from both manufacturers, from 2014 until at least October 2017, so that they would not compete.
During 2015 and 2016, Morningside and AMCo also committed to supply nitrofurantoin exclusively to Alliance Healthcare, the watchdog added.
The CMA also alleged that AMCo disclosed sensitive pricing information to Morningside in 2014, with the aim of reducing competition between them.
“We’ve provisionally found that suppliers of this important antibiotic entered into arrangements with the aim of keeping nitrofurantoin capsule prices artificially high, meaning the NHS wouldn’t benefit from the lower prices that come from effective competition,” CMA senior director of antitrust Ann Pope said.
The findings set out in the CMA’s statement of objections are provisional, and will be investigated further before conclusions are drawn, the watchdog stressed.
“Prices didn't fall as expected”
Nitrofurantoin, which is a prescription-only medicine, is used to treat urinary tract infections, such as cystitis. The CMA investigation focused on both the 50mg and 100mg capsule forms.
Until mid-2014, AMCo was the sole UK provider of nitrofurantoin, before Morningside entered the market. However, the usual price fall that is expected when a new competitor begins to supply a drug was not observed at this time, the CMA said.
“Drug companies that break competition law risk forcing the NHS and UK taxpayers to pay over the odds for important medical treatments,” Ms Pope added.
In a statement issued to C+D, Alliance Healthcare said it “takes note” of the CMA allegations, but said it “does not believe that competition law has been infringed”.
“We take competition law very seriously...and will review the CMA's provisional position”. It plans to respond “in detail” to the allegations and defend its position, while “working constructively” with the watchdog.
Manufacturer Advanz – which was formally known as Concordia – acquired the antibiotic from manufacturer Cinven, as part of its acquisition of AMCo in 2015. It said the allegations “include matters that pre-date our ownership of the medicine”, but also does not believe competition law has been infringed.
“We are committed to ensuring continued access to high quality, niche-established medicines for patients in the UK,” Advanz told C+D.
“We will review the CMA's prelimary position and plan to respond in detail as we continue to work constructively with the CMA.”
Morningside “strongly refutes” the CMA's allegations, but said it will “continue to work constructively with it to demonstrate Morningside’s commitment to patient choice and a competitive market”.