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Watchdog accuses Pfizer of 'excessive' epilepsy drug price

The CMA will consider any representations from Pfizer and Flynn Pharma before deciding if the law has been infringed

The Competition and Markets Authority is investigating why the price of phenytoin sodium capsules to the NHS has risen by more than 25 times since 2012

Pfizer has attracted damning criticism from the government's competition watchdog for allegedly charging “excessive” prices for its epilepsy tablets.

Manufacturer Pfizer and distributor Flynn Pharma “abused” their dominant position in the market by charging “unfair prices” to UK pharmacies for phenytoin sodium capsules, the Competition and Markets Authority (CMA) alleged in a “provisional” statement yesterday (August 6).

The CMA stressed that it has not yet ruled whether the prices consititute a breach in competition law, but said it is "concerned" about the rise in annual NHS spend on the drug from £2.3 million prior to 2012 to more than £40m in 2014.

In response to the criticism, Pfizer said it had "fully complied" with price regulation schemes along with Flynn Pharma. It also said the the branded version, Epanutin, had been a "loss-maker" and that its primary concern was continuing to ensure a "sustainable supply" to patients.

Prices for phenytoin sodium capsules rose after Pfizer’s patent for Epanutin expired in 2012. Pfizer went on to manufacture a generic version, which it sold on to Flynn Pharma for distribution at a price that was "between 8 and 17 times" higher than the historic cost of the drug, the CMA said.

Flynn Pharma sold the drug onto customers for between 25 and 27 times the original cost of the branded version Epanutin, the CMA alleged. 

Pfizer stressed that the sale of the distribution rights for the generic drug to Flynn Pharma – which decided the retail price of the drug "independently" of Pfizer – was an attempt to make the drug profitable and “ensure a sustainable supply to UK patients”.

Flynn Pharma director David Fakes told C+D that the company has been “co-operating with the CMA for some time”. It will respond to the CMA’s findings and “defend ourselves against any allegations”, he added.


“No conclusion drawn”

The CMA's "provisional" view is that both companies have breached UK and EU competition law, although “no conclusion can be drawn at this stage”. The CMA objects to both the price that Pfizer charged Flynn for the generic and the price Flynn then charged pharmacies and wholesalers, but it pledged to “carefully consider” representations from the companies before deciding whether the law has been infringed.

Although businesses are “generally free to set prices as they see fit”, those in a “dominant position” have a “special responsibility to ensure... their prices are not excessive”, said CMA senior director of antitrust enforcement Ann Pope.

“In this case, the prices... have led to a big increase in the total NHS drug bill for what is a very important drug for tens of thousands of patients,” Ms Pope added.

Pfizer said CMA’s investigation into drug pricing is “particularly troublesome in an industry that is already subject to price regulations".

"[It] inserts further legal uncertainty because prices approved under the drug tariff become subject to further review by an authority [that does not provide] clearance of the proposed price in advance," it added.

Phenytoin sodium capsules were one of the drugs highlighted in a 2013 article in The Independent, which claimed the epilepsy drug had risen in price from 67p to £15.98. In response to the article, PSNC called on manufacturers to justify the “significant” extra costs they were inflicting on pharmacies.


Do you agree with the CMA investigation into phenytoin sodium prices?

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Yo Palumeri, Community pharmacist

Once again this is a result of politicians trying to manage a market very unsuccessfully. What would the price been under normal free market conditions?

Really? Wow, Superintendent Pharmacist

Oh, and for those who are ambivalent to the Amdipharm situation...have you checked the discount that you on their products? 0.4%....that isn't a you will get full clawback at 10-11%.... Good isn't it?!

Leon The Apothecary, Student

I like how the branded product is the same thing inside the generic product.

Really? Wow, Superintendent Pharmacist

I think we are all being a little unfair in this exact circumstance. The PPRS is a horse trading scheme of murkiness where the pharma companies do a deal with the DOH where they charge lower prices for some medicines so the government will pay the big money for their new cancer drugs. £2.3m total spend nationally for a medicine is nowhere near a sustainable level to continue production and in this case the option would have been to stop making the medicine or use a method to increase the price. I am not sure why we are targeting this situation when Amdipharm and a few others are repeatedly pillaging the market. Look at Acetazolamide, Anturan, Carbimazole, Fucithalmic........etc etc

Z ZZzzzz, Information Technology

I agree the DH and govt are complicit in that generic prices were once again excluded from the latest PPRS scheme. But some price increases are getting beyond a joke. If there is a case that the raw ingredient price has gone up then the manufacturer could justify perhaps an increase in price. If that was the case then drug ingredient cost must be the only commodity that has gone up in price over the past 4 years. Every other commodity has decreased in cost. But we know that is not the case and Big Pharma are sticking two fingers up to the tax payer because PPRS is keeping a lid on the price of existing brands. However if a brand included in PPRS then becomes a generic with no price cap Big Pharma can make more than the profit that was initially negotiated as PPRS takes no account of profit levels due to generic supplies. I'm sure the accountants employed by DH etc are just as aware of this as me. Thus why I state they must be complicit.

London Locum, Locum pharmacist

This goes to the core of Pharmacy where you will find it"s all about the MONEY and certainly not patients - The lie that is persistently rolled out by all and sundry.

Bal Singh, Locum pharmacist

When the global sum decreases and pharmacies get shafted with reimbursement, should it be about anything else? Look how pharmacy contractors are paid, then look how the pay gets cut. DoH wants to make it about money, then get cynical when others go do the same.

Z ZZzzzz, Information Technology

This was all pointed out at the time of the shuffling around of the product. Why has it taken the best part of 2 years to get to this still inconclusive point? The CMA should be looking at the recent price increase by AmCo of what was Diconal, comparing that to what Diconal used to cost - £9.57. New generic price - £272.02. Another possible abuse of the system, and not the first by AmCo over the past few years. Instead of looking at yet more efficiency saving around the NHS (or should I say as well as...) perhaps the DH should keep a lid on some of these generic price increases and not bury their heads in the sand hoping Mr Marketplace will sort the prices. That won't happen when there is only one player in a particular Marketplace. Or am I missing something that DH are privy to. When TEVA swallow up Actavis soon, there will be an even smaller Marketplace.

Absolutely right! I and others made noises years ago about this way of circumventing the system. Why has it taken the regulatory authorities so long to spot this. The same thing has happened with quite a few other old but still prescribed products being "sold" to small Pharma companies who are little more than an office. This is just one of many things that has made me a Pfizer despiser

Z ZZzzzz, Information Technology

You are not the only Pfizer despiser. If you search online for pregabalin court case you will find the whole sorry mess hinges on interpretation of the word "for". I'm sure the lawyers on both sides of the argument are laughing all the way to the bank, meanwhile Pfizer keep on taking the cash from the NHS. Pfizer and AmCo, imagine them merging. Marriage made in heaven for Big Pharma; made in hell for the taxpayer.

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