The Competition Appeal Tribunal in the UK has overturned a £90 million fine against Pfizer and Flynn Pharma issued by the Competition and Markets Authority for charging unfair prices for phenytoin sodium capsules.
Originally Pfizer manufactured and sold the capsules to UK wholesalers and pharmacies under the brand name Epanutin for epilepsy. But the drug’s NHS price rocketed 2,600 percent overnight after it was actively genericised in September 2012, through a sale of UK distribution rights to Flynn, placing it outside the realms of normal price regulation, the CMA said back in 2016.
From September 2012, Pfizer continued to manufacture phenytoin sodium capsules and supplied them to Flynn at prices “significantly higher” – between 780 percent and 1,600 percent – than those at which it previously sold Epanutin in the UK. Flynn then sold the drug on to UK wholesalers and pharmacies charging prices between 2,300 percent and 2,600 percent higher than those previously paid, according to the agency.
The CMA ruled that both companies held a dominant position in their respective markets for the manufacture and supply of phenytoin sodium capsules and “each abused that dominant position by charging excessive and unfair prices”, triggering the record fine.
However, the Tribunal ruled against the CMA’s finding of abuse and referred the case back to the Authority for further consideration.
According to the judgment, the CMA erred in its reliance on the approach it used to determine that Pfizer’s and Flynn’s prices were excessive, and also failed to adequately assess the possible impact of meaningful comparators for the purpose of deciding whether the prices were unfair.
“The Tribunal’s judgment makes it clear that a finding of abuse remains possible given the size of the price increase that occurred. It is regrettable that the Tribunal chose not to make its own finding as to whether Pfizer and/or Flynn Pharma had committed an abuse, which was within its powers,” the CMA noted.
The Authority said it will now “carefully review” the judgment, and will consider whether to appeal “in light of its importance to the NHS and the potential implications for similar cases”.
In a short statement, Pfizer said it is pleased with the decision, claiming: “Our priority has always been to ensure a sustainable supply of our medicines to UK patients and this was at the heart of our decision to divest this medicine.”
