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Pfizer and Flynn accused of overcharging for epilepsy drug

UK watchdog investigating the firms over the millions of pounds spent on Epanutin

Pfizer HQ 

Pfizer and Flynn Pharma are under investigation amid claims they charged "excessive and unfair" prices for a widely-used epilepsy drug in the UK.

The probe by the Competition and Markets Authority (CMA) is focusing on phenytoin sodium, a drug that has been used to treat epilepsy for decades, which is manufactured by Pfizer but sold in the UK by Flynn Pharma.

It is estimated that around 50,000 people in the UK take phenytoin to control tonic-clonic and focal  seizures caused by epilepsy as well as those caused by head trauma or brain surgery.

Pfizer's brand name for the drug in the UK was Epanutin and according to the CMA the NHS spent around £2.3m ($3.6m) on the drug before it sold the UK distribution rights to Flynn Pharma in 2012, which promptly de-branded the product.

By 2013, the cost to the NHS had rocketed up to £50m, says the CMA in a 'statement of objections' released yesterday. The allegations come at a time when prescribing costs in the UK are rising and pharma companies are being challenged to show how they can provide value for money.

Pfizer has been drawn into the dispute because the CMA is concerned about "both the prices that Pfizer has charged to Flynn Pharma and the prices that Flynn Pharma has charged to its customers," alleging Pfizer hiked the drug's cost "between eight and 17 times."

Flynn then sold the drug on to customers at prices which were between 25 and 27 times higher than those historically charged by Pfizer, says the CMA, which accuses the two companies of exploiting a strong position in the market.

"Businesses are generally free to set prices as they see fit," said Ann Pope, the CMA's senior director of antitrust enforcement.

"Those that hold a dominant position have a special responsibility to ensure that their conduct does not impair genuine competition."

The CMA stresses that its findings are so far only provisional, and both companies now have the opportunity to provide formal responses to the allegations. A final ruling is not expected until next year, and both companies face penalties of up to 10% of annual group sales if the investigation concludes they abused their position.

Pfizer and Flynn said they are cooperating with the probe, with Pfizer saying that "ensuring a sustainable supply of our products to UK patients … was at the heart of our decision to divest the product."

Pfizer told news wire Reuters it had set the price of the drug at a level that was profitable in order to ensure a stable supply, while Flynn indicated the price it charged was in line with rival drugs.

Article by
Phil Taylor

7th August 2015

From: Regulatory

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