The UK’s Competition and Marketing Authority is accusing Pfizer and Flynn Pharma of breaching competition law by charging “unfair and excessive” prices for epilepsy drugs.
The CMA says that its provisional view is that the two companies abused their dominant position in the sale of phenytoin sodium capsules.
Prior to September 2012 Pfizer sold these capsules under the brand name Epanutin. Once its patents expired, Pfizer continued to manufacture the drug but sold the distribution rights to Flynn.
However, the US firm supplied the drug at a price eight to 17 times higher than it had previously been charging, and Flynn increased the price further still, selling the capsules on to customers at prices 25-27 times higher than its historic cost.
Ann Pope, the CMA’s senior director of antitrust enforcement, says: “While businesses are generally free to set prices as they see fit, those that hold a dominant position have a special responsibility to ensure that their conduct does not impair genuine competition and that their prices are not excessive and unfair.
“The prices that the CMA is concerned about in this case are very high compared to those prices previously charged and 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.”
The CMA notes that before September 2012 the NHS spent £2.3 million on phenytoin sodium capsules, but this has risen to £50 million in 2013 and £40 million in 2014.
Pope adds: “The CMA’s findings on dominance and abuse are provisional and no conclusion can be drawn at this stage that there has, in fact, been any breach of competition law. We will carefully consider any representations from Pfizer and Flynn Pharma before deciding whether the law has been infringed.”
Pfizer and Flynn say that they are cooperating fully with the CMA. Pfizer told Reuters that it had priced the drug to make it profitable and ensure there would be a sustainable supply, while Flynn said that it had priced it competitively against rivals.