UK drug firm accused of price gouging by competition authority
Drug firms Actavis UK and Concordia have been accused by the Competition and Markets Authority (CMA) of making an illegal deal to boost the price of hydrocortisone tablets in the UK, which are prescribed to people who cannot produce sufficient steroid hormones. The CMA alleges that the deals made between 2013 and 2016 incentivised Concordia not to produce its own version of the medicine, enabling Actavis to increase the amount it charged the NHS by 80% from £49 to £88 per pack. The regulator's findings so far are provisional, however, if found guilty of breaking competition laws, the companies face substantial fines.

Two drugs firms have been accused by the competition watchdog of making illegal deals in order to inflate the price for life-saving hydrocortisone tablets in the UK.

It is alleged that Actavis UK incentivised its rival Concordia not to enter the market with its own version of the tablets so that it could remain the sole supplier of the drug in the UK and charge higher prices.

The agreements were made between January 2013 and June 2016, the Competition and Markets Authority (CMA) claimed, and enabled Actavis to increase the price it charged the NHS by 80% over the period from £49 to £88 per pack.

Hydrocortisone tablets are prescribed to people whose adrenal glands do not produce enough steroid hormones, such as those suffering from Addison’s disease. About 1m prescriptions of the drug were distributed last year.

Andrew Groves, the CMA’s senior responsible officer for the investigation, said: “Anti-competitive agreements can cost the NHS, and ultimately the taxpayer, by stopping competition bringing down the cost of lifesaving drugs like hydrocortisone tablets.

“We allege these agreements were intended to keep Actavis UK as the sole supplier of a drug relied on by thousands of patients – and in a position which could allow it to dictate and prolong high prices.”

The regulator said at this stage the findings were provisional and that it would carefully consider any representations made by Actavis and Concordia. The two companies face hefty fines if the CMA concludes they broke competition law.

The investigation is part of a wider clampdown by the regulator on the pharmaceutical industry. It fined Pfizer a record £84.2m in December, after finding the price charged to the NHS for an anti-epilepsy drug was increased overnight by up to 2,600%.

In this latest case, the CMA alleges that Actavis supplied Concordia, formerly Amdipharm, with a fixed supply of its own 10mg hydrocortisone tablets for a very low price. Concordia then resold the product to customers in the UK. Actavis remained the sole supplier of the tablets in the UK during most of this period, and because the drug was generic, it was not subject to price regulation.

Actavis was already under investigation by the regulator, accused of overcharging the NHS for the tablets, after hiking prices by 12,000% over the course of several years. Prices rose from 70p a pack in April 2008 to £88 by March 2016.

A spokesperson for Actavis said the company was not commenting on the ongoing investigation.

Concordia International said it was cooperating with the CMA.

“We believe that the conduct of Amdipharm was not in breach of competition law. We will review the CMA’s provisional position as set out in its statement of objections and then intend to respond in detail to it,” it said.

“As previously disclosed, we are cooperating fully with the CMA in this investigation. We believe that the supply arrangement between Auden Mckenzie, which was acquired by Actavis in 2015, and Amdipharm for full-indication 10mg hydrocortisone tablets did not infringe competition law.”