Manufacturer Actavis UK hiked the price of “lifesaving” drugs by over 12,000% compared to branded versions, the government’s competition watchdog has alleged.
Actavis charged “excessive and unfair prices” for generic versions of hydrocortisone, the Competition and Markets Authority (CMA) claimed in a provisional ruling on the case today (December 16).
Manufacturer Teva, which acquired Actavis in August, told The Pharmacist it was reviewing the allegations, and intended to “defend” them.
Under Actavis, the amount the NHS was charged for packs of hydrocortisone 10mg tablets rocketed from 70p in April 2008 to £88 by March 2016, the CMA said.
Actavis’s 20mg packs of the drug also dramatically increased, rising by almost 9,500% compared to the previous branded price. The NHS was charged the equivalent of £102.74 per pack in 2016, whereas it was only charged £1.07 for the branded drug.
Unlike branded drugs, generics are not subject to price regulation.
The amount the NHS spent on hydrocortisone tablets rose exponentially between 2008, when it spent around £522,000 a year, and 2016, when it spent £70 million.
“No conclusions” yet
The CMA’s allegations that Actavis broke competition law through its pricing of the drug is only “provisional”, and “no conclusion should be drawn” yet, it stressed.
The competition watchdog will “carefully consider” representations of the parties in the investigation before deciding whether Actavis has infringed the law, it said.
“Serious policy concerns”
Although Actavis’s charges for hydrocortisone was never under Teva’s “effective control”, the CMA’s intervention in generics pricing “raises serious policy concerns regarding the roles of both the CMA and the Department of Health”, said Teva.
Teva added: “Generic medicines continue to be an affordable alternative to branded therapies. Teva is proud of our track record in bringing cost savings to the NHS as the UK’s largest generic medicines manufacturer. Competition from generic medicines saves the NHS in England and Wales £13.5bn per year overall, and Teva medicines account for approximately £3.2bn of this saving.”
NHS and taxpayer “footing the bill”
The CMA’s responsible officer Andrew Groves stressed that hydrocortisone is a “lifesaving drug” used by thousands of patients which the NHS has “no choice but to continue purchasing”.
“We allege that [Actavis] 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 substantial price rises,” he said.