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Alliance one of 3 firms accused of keeping nitrofurantoin prices high

The CMA investigation focused on both 50mg and 100mg capsule forms
The CMA investigation focused on both 50mg and 100mg capsule forms

Alliance Healthcare and two manufacturers entered into anticompetitive agreements to keep prices of nitrofurantoin “artificially high”, a government watchdog has alleged.

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”.

You can read the responses from Alliance Healthcare, AMCo and Morningside below.

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.

Alliance “does not believe law infringed”

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.

Advanz: Matters pre-date our ownership

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 concerns”

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”.

10 Comments
Question: 
Do you regularly dispense nitrofurantoin in your pharmacy?

The One Horseman of the Apothecalypse, Community pharmacist

I long for one of Alliance's staff to come through the door with an urgent script for something like Prograf, so I can hand it back and say, "Can't do for a couple of days, quota exceeded."

Surprised Alliance Healthcare are still though sufficiently competent have a wholesale dealers' licence.

Anything to do with AmCo/Concordia/any other name associated with them no longer surprises me.

Mohammed Shabir, Community pharmacist

Over the last few years we, as pharmacists have struggled getting hold of medicines at a cost which is, at the end of the day the best price for the NHS. This case shows collusion by manufacturers to make a quick buck at the expense of the NHS. The only way to stop this practice is to give exemplary punishment to these manufacturer's/wholesalers.

But we know this is not gonna happen. 

www.independent.co.uk/news/uk/politics/tory-health-minister-blocks-law-to-give-the-nhs-cheap-drugs-whose-patents-have-expired-a6724526.html

Ben Merriman, Community pharmacist

https://services.parliament.uk/bills/2016-17/healthservicemedicalsuppliescosts.html

Independent Dave, Community pharmacist

Hmmm....how will the government respond? I know, let’s close down all the Independents!!!

A.S. Singh, Community pharmacist

Can someone explain why CCG's continue to prescribe branded generics, ultimately 1) breaching CMA 2) Completely undermining the negioations between Doh and PSNC with V111 DT reimuburment prices 3) Once agreed, become a manufacturing problem due to a forced demand. The only people who should be benefitting are commnity pharmacy as we still take 10% hit on generics anyway. Why is this still ongoing? 

N O, Pharmaceutical Adviser

These are the fruits of Govt's ignorance on DTP arrangements too. Its high time the Govt stopped such back door malpractices and put an end to such cases from happening. But ............... 

Tom Jerry, Community pharmacist

Totally Agree...DTP has only added cost to Tax Payers,  restricted drug access for patients compromising their health needs, allowed Manufacturers to capitalise immensely on exportation ie like to the States, increased complexity to dispensing with added expense immensely time comsuming, discounts not reciprocated by the NHS equating to nothing less than Grand Fraud against Contractors..  how embarrassing....CMA need to look be looking at the practices of  The DOH...,

 

 

 

 

Kevin Western, Community pharmacist

Now  who would have thought a Wholesaler would do such a thing? - they obviously are all about supplying medicines at competitive prices as quickly and smoothly as possible to their customers who can shop around if they become expensive, restricting of supply to one wholesaler to allow control of prices would never cross their minds, being fine, upstanding people with high ethical standards.

its obviously rubbsh!

Stephen Walsh, Community pharmacist

Long overdue.

Leon The Apothecary, Student

Ha! Like some of my locum payments!

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