Pharmaceutical company accused of overcharging NHS

The CMA has provisionally found that Actavis UK has broken competition law by charging excessive prices to the NHS for hydrocortisone tablets.

The pharmaceutical company Actavis UK (formerly Auden Mckenzie) has increased the price of 10mg hydrocortisone tablets by over 12,000% compared to the branded version of the drug which was sold by a different company prior to April 2008. For example, the amount the NHS was charged for 10mg packs of the drug rose from £0.70 in April 2008 to £88.00 per pack by March 2016.

The company also increased the price of 20mg hydrocortisone tablets by nearly 9,500% compared to the previous branded price, equating to charges to the NHS of £102.74 per pack by March 2016, when it had previously paid £1.07 for the branded drug. De-branded (genericised) drugs are not subject to price regulation.

In a statement of objections issued to the company today, the CMA has alleged that in doing so it broke competition law by charging excessive and unfair prices in the UK for the tablets.

Hydrocortisone tablets are used as the primary replacement therapy for people whose adrenal glands do not produce sufficient amounts of natural steroid hormones (adrenal insufficiency), as for example with Addison’s disease. The condition is life threatening. Approximately 943,000 packs were dispensed for hydrocortisone tablets in the UK in 2015.

Prior to April 2008, the NHS spent approximately £522,000 a year on hydrocortisone tablets. By 2015, NHS spend on the tablets had risen to £70 million a year.

Andrew Groves, CMA Senior Responsible Officer, 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.

"The CMA’s findings are provisional and no conclusion should be drawn at this stage that there has in fact been any breach of competition law. The CMA will carefully consider any representations of the parties under investigation before determining whether the law has been infringed."

The CMA has 3 other ongoing investigations into the pharmaceutical sector. Last week, the CMA fined the pharmaceutical suppliers Pfizer and Flynn Pharma a total of nearly £90 million for charging excessive prices for the anti-epilepsy drug phenytoin sodium, after that drug was also de-branded. In February this year the CMA fined a number of pharmaceutical companies a total of £45 million for anti-competitive agreements and conduct in relation to the supply of the anti-depressant drug paroxetine.

The CMA opened this investigation in March this year. For more information see the case page.