Concordia and Actavis UK stand accused of breaking UK competition law by artificially lifting the cost of hydrocortisone tablets to the National Health Service with a deal that delayed competition to the drug.
The Competition and Markets Authority (CMA) is alleging that between January 2013 and June 2016 the firms agreed a deal under which Actavis incentivised Concordia not to enter the market with its own competing version of hydrocortisone pills.
The CMA alleges that, under the arrangement, Actavis instead supplied Concordia with a fixed supply of its own 10mg tablets for a very low price for Concordia to resell in the UK, thus retaining its position of sole supplier in the country during most of the period, when the cost of the drug to the NHS rose from £49 to £88 per pack.
Actavis bought the previously branded version of hydrocortisone - used as the primary replacement therapy for people whose adrenal glands do not produce sufficient amounts of natural steroid hormones - back in 2008, which effectively ‘de-branded’ the drug and thus excluded it from normal NHS price regulation.
In December, a separate CMA investigation accused Actavis of charging excessive prices to the NHS for its tablets, following a 12,000 percent price rise over the course of several years.
The agency has provisionally found that the agreements enabled the firm to prolong the high prices in the market, “depriving the NHS of the significant price falls that would be expected to result from true competition”.
“Anti-competitive agreements can cost the NHS, and ultimately the taxpayer, by stopping competition bringing down the cost of lifesaving drugs like hydrocortisone tablets,” commented Andrew Groves, CMA senior responsible officer.
But he also stressed that at this stage the 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 now “carefully consider any representations of the companies under investigation before determining whether the law has been infringed,” he said.
Concordia said it did not believe there was a breach in competition law. In a statement, the firm said it will review the CMA's provisional position before responding in detail, and that is it “cooperating fully” with the investigation.