Pfizer Inc. has been accused of inflating the price of an anti epileptic drug, known as phenytoin sodium, in the UK.
The UK Competition and Markets Authority accused the US drug maker of abusing its position in the market by charging excessive and unfair prices for the drug – breaching competition law.
The drug, used by over 50,000 patients across Britain, used to marketed by Pfizer (under the brand name Epanutin) but the drug maker sold the rights to Flynn Pharma Ltd in September 2012 and the two companies entered a distribution agreement.
Since then the product has surged.
The CMA said that because of the arrangement Pfizer continued making the drug and it to Flynn Pharma at up to 17 times the price the pharmaceutical giant previously charged wholesalers and pharmacies.
On top of that, the CMA alleged that Flynn sold the drug to customers at prices up to 27 times higher than what Pfizer previously charged before the arrangement.
Pfizer could be fined up to 10% of its annual global revenue if the CMA finds it breached competition law.
The UK NHS bill for the drug surged
As a result, the UK National Health Service saw its bill for the drug surge from around £2.3 million to more than £50 million in 2013 and over £40 million in 2014.
The CMA’s senior director of antitrust enforcement, Ann Pope, said:
“While businesses are generally free to set prices as they see fit, those that hold a dominant position have a special responsibility to ensure that their conduct does not impair genuine competition and that their prices are not excessive and unfair,”
She added that the CMA is will “carefully consider any representations from Pfizer and Flynn Pharma before deciding whether the law has been infringed.”
“The prices that the CMA is concerned about in this case are very high compared to those prices previously charged and have led to a big increase in the total NHS drug bill for what is a very important drug for tens of thousands of patients.”
Pfizer said in a statement:
“Ensuring a sustainable supply of our products to U.K. patients is of paramount importance to Pfizer and was at the heart of our decision to divest the product.
“Pfizer is co-operating fully with the CMA’s ongoing investigation.”