The Competition and Markets Authority (CMA) has provisionally found that AMCo (now Advanz) and Morningside, both sellers of the antibiotic nitrofurantoin broke competition law by arranging to carve up the market between them.
In a Statement of Objections issued, the CMA alleges that from 2014 until at least October 2017 the companies entered into arrangements under which Alliance Healthcare would buy equal volumes of the drug from each of the two suppliers so that they would not compete. During 2015 and 2016, the two suppliers also committed to supply the drug exclusively to Alliance Healthcare.
The drug in question is an antibiotic commonly used to treat urinary tract infections such as cystitis. While it is available as tablets and a liquid, this investigation focuses on the capsule forms (50mg and 100mg) which are a prescription-only medicine.
Advanz was previously the sole UK supplier of both products, until Morningside entered the market in mid-2014. The allegations claim that in May 2014, Advanz disclosed sensitive pricing information to Morningside with the aim of reducing competition between them.
In the Statement of Objection it is provisionally considered that these arrangements prevented or restricted competition, as when Morningside started supplying the drug, this was not followed by the price falls that would normally be expected when a new competitor enters the market.
Ann Pope, the CMA’s senior director of antitrust, said that drug companies that break competition law “risk forcing the NHS, and UK taxpayers, to pay over the odds for important medical treatments.
“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."
A spokesperson for Morningside also said that while they “strongly refute the concerns raised by the CMA in its Statement of Objections, we will continue to work constructively with them to demonstrate Morningside’s commitment to patient choice and a competitive market.”
The CMA reminds that these findings are provisional and no conclusion should be drawn at this stage that there has in fact been any breach of competition law.