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UK competition authority accuses Actavis of overcharging NHS Posted 13/01/2017

The UK’s Competition and Markets Authority (CMA) has accused Actavis of breaching competition law by increasing the price of generic hydrocortisone tablets by more than 9,500−12,000% compared to the brand-name product, which was sold by a different company prior to April 2008.

Actavis’ life-saving hydrocortisone tablets are prescribed to people whose adrenal glands do not produce enough steroid hormones, such as those suffering from Addison’s disease. It is estimated that almost one million prescriptions were distributed in the UK during 2015.

Actavis is being accused of inflated the price of 10 mg and 20 mg hydrocortisone tablets since the brand-name drug exited the market. The CMA claims that the cost of 10 mg hydrocortisone tablets rose from 70 pence to GBP 88 a tablet between April 2008 and March 2016, an increase of 12,000%. Over the same period the 20 mg packs were increased by 9,500% from GBP 1.07 to GBP 102.74 per pack. Prior to April 2008, the National Health Service (NHS) spent about GBP 522,000 a year on hydrocortisone tablets. By 2015, as a result of the price increases, the NHS was spending GBP 70 million a year on the tablets.

Actavis is the only supplier of hydrocortisone tablets in the UK and, as generics are not subject to price regulation in the UK, the price is not regulated. This is a situation that the company has taken advantage of, according to Andrew Groves, CMA Senior Responsible Officer. He added that ‘this is a lifesaving drug relied on by thousands of patients, which the NHS has no choice but to continue purchasing’.

The CMA noted that the findings are provisional at this stage and also noted that it has three other ongoing investigations into the pharmaceutical sector. However, it pointed to similar cases where it has fined pharma companies. In February 2016, the CMA fined a number of pharmaceutical companies a total of GBP 45 million for anti-competitive agreements and conduct in relation to the supply of the anti-depressant drug paroxetine. And in December 2016, the agency fined Pfizer and Flynn Pharma almost GBP 90 million for charging excessive prices for the anti-epilepsy drug phenytoin sodium, after that drug was also de-branded.

Israeli generics giant Teva Pharmaceutical Industries, which acquired Actavis in October 2016 [1], has said that it would defend the company against the allegations. It also believes that ‘intervention by the CMA in prices for generic medicines raises serious policy concerns regarding the roles of both the CMA and the Department of Health’.

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1. GaBI Online - Generics and Biosimilars Initiative. Teva sells Actavis’ UK and Ireland generics business to Intas [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2017 Jan 13]. Available from: www.gabionline.net/Generics/News/Teva-sells-Actavis-UK-and-Ireland-generics-business-to-Intas

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Source: CMA, Reuters

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