The NHS has been given a £1 million payout from four pharmaceutical firms after an investigation found they had collectively engaged in anti-competitive practices that pushed up the cost of an antidepressant.
The investigation, conducted by the Competition and Markets Authority (CMA) into the supply of nortriptyline, resulted in fines of more than £3.4 million, payment of £1 million to the NHS and the disqualification of a company director.
The National Pharmacy Association (NPA) chief executive, Mark Lyonette, expressed his concern on how this illegal activity can negatively impact community pharmacy.
‘Community pharmacists can also lose out’
He said: ‘As restricted competition can lead to the NHS and taxpayers facing higher costs, we are not surprised that the CMA has imposed significant financial penalties on these companies.
‘Community pharmacists can also lose out if a lack of choice results in higher medicines prices.’
The competitions watchdog discovered that between September 2014 and May 2015, drug firms King Pharmaceuticals Ltd and Auden Mckenzie (Pharma Division) had struck a deal to fix quantities and prices. They agreed that each firm would provide different quantities of nortriptyline to a wholesaler – one firm selling 10mg and the other 20mg – removing competition and so breaching competition law.
NHS spending on the drug peaked at £38 million in 2015, during the time the firms were colluding to keep prices up.
The firms King Pharmaceuticals Ltd and Accord-UK – the company which later took control of Auden Mckenzie’s nortriptyline business – were fined £75,573 and £1,882,238 respectively for their illegal activities.
Accord-UK and Auden Mckenzie also agreed to make a £1 million payment to the NHS in connection with the case.
The CMA has also penalised King, Lexon’s UK business and Alissa Healthcare Research for illegally sharing commercially sensitive information in an attempt to keep nortriptyline prices up between 2015 and 2017.
In September 2019, King and Alissa both admitted to breaking the law, and they are being fined £75,573 and £174,912 respectively.
Lexon did not admit to breaking the law and is being fined a total of £1,220,383.
The CMA has also secured the disqualification of a director at King and the sole director of consultancy firm Praze, Dr Philip Hallwood, who was director of King during its involvement in illegal activity.
The ex-director is now banned from involvement in the management of any UK company for seven years.
The regulator is considering possible disqualification of other directors involved in the scandal.
‘Cheating the NHS’
In response, chief executive at the CMA, Andrea Coscelli, said: ‘These firms exchanged sensitive information and shared out supply to try and keep prices up, meaning the NHS – and ultimately the UK taxpayer – could have been paying over the odds for this vital drug.
‘Today’s decisions should act as a clear warning to any pharmaceutical company that considers stifling competition and cheating the NHS.’
The total payment of £1 million made by Auden Mckenzie and Accord-UK to the NHS will be split between the Department of Health and Social Care (DHSC) in England and the equivalent bodies in Scotland, Wales and Northern Ireland.