South African pharma company Aspen is set to pay the NHS £8m ($9.9m) in the next few weeks, after an investigation by the UK’s Competition and Markets Authority (CMA) found it had unlawfully paid two other companies to stay out of the market for fludrocortisone acetate tablets.
Aspen paid Amilco and Tiofarma to stay out of the market to ensure that it would remain the sole UK supplier of the prescription-only medicine. According to the CMA, thousands of patients rely on the medicine, which is used to treat primary or secondary adrenal insufficiency (Addison’s Disease).
The illegal agreement allowed Aspen to increase the prices of the drug by up to 1800%, as it was the only supplier to the NHS.
Additionally, as part of the agreement made between the companies, Tiofarma was made the only manufacturer of the drug for direct sale in the UK, and Amilco received a 30% share of the increased price.
In August, Aspen admitted that it had took part in the arrangement, but the other two companies implicated have made no admission.
Following the investigation, the CMA has accepted Aspen’s offer of commitments to resolve a related concern regarding it’s purchase of a rival fludrocortisone product from Tiofarma in 2016. This acquisition made Aspen the sole owner of all existing fludrocortisone marketing authorisations in the UK.
Aspen had agreed to pay a maximum penalty of £2.1m and has committed to ensuring that there are at least two suppliers fo the drug in the UK to help the NHS obtain more competitive prices.
“The CMA has today provisionally found that Aspen, Amilco and Tiofarma broke competition law by taking part in an illegal agreement which led to a significant price hike for a lifesaving drug,” said Michael Grenfell, executive director, enforcement at the CMA.
“The NHS should not be denied the opportunity of benefitting from an increased choice of suppliers, and so potential savings on what it spends on essential drugs,” he added.
This is not the first time that Aspen has been investigated for price-gouging – in 2017, the European Commission said it was looking into concerns that it had abused its dominant position in the market to increase prices of five generic cancer medicines.
The EC was concerned that Aspen may have used the tactic of withdrawing or threatening to withdraw the medicines – chlorambucil, melphalan, mercaptopurine, tioguanine and busulfan – from sale in some EU member states, leading to shortages.