The Competition Appeal Tribunal (CAT) has upheld the Competition and Markets Authority’s (CMA) findings against two pharmaceutical manufacturers for consistently overcharging hydrocortisone tablets for over a decade. Auden/Actavis UK, now known as Accord-UK, was found to have abused its dominant market position by increasing the price of hydrocortisone by over 10,000%, resulting in fines nearing £130 million.
According to the CMA, Auden/Actavis UK’s pricing from 2008 to 2018 constituted an abuse of dominance. The fines imposed are the highest ever upheld by the Tribunal. The companies raised the price of this critical medicine from 70p to £72 during that period.
This recent verdict comes after the CMA imposed fines exceeding £265 million on Auden Mckenzie and Actavis UK in July 2021. The fines were imposed for abuse of dominance and collusion by both parent companies and potential competitors.
The recent judgment focused on the abuse of dominance findings, which amounted to £155.2 million of the original CMA fine. The Tribunal upheld the CMA’s penalties in all other respects, resulting in the total penalties for the abuses being reduced by approximately £26 million, to nearly £130 million. However, the Tribunal has not yet issued its decision regarding the appeal against the CMA’s collusion findings.
The impact of these companies’ actions on the NHS, patient care costs, and taxpayers is significant. Hydrocortisone tablets are crucial for treating life-threatening conditions like Addison’s disease, and tens of thousands of individuals rely on them. NHS expenditure on this medicine surged from about £0.5 million annually to over £80 million due to the price escalation.
The CAT’s decision now clears the path for the NHS to pursue compensation. The NHS has invested hundreds of millions of pounds in these drugs, and the judgments support its efforts to seek redress.
In a related case, the CAT previously upheld the CMA’s £84 million fine on Advanz Pharma, alongside private equity firms Cinven and HgCapital. They were found guilty of inflating the price of a thyroid drug by over 1,000% over an eight-year period.
Sources:
– Competition Appeal Tribunal
– Competition and Markets Authority
