UK watchdog: Pfizer and Flynn Pharma overcharged NHS

For nine years Pfizer has argued that its decision to de-branded its epilepsy drug Epanutin (phenytoin) was made in the best interests of patients.

However, after the decision resulted in a 2,600% price increase that cost the NHS £50m in 2013 alone, the UK’s Competition and Markets Authority (CMA) took another view.

In 2016, a CMA investigation found that Pfizer and its UK partner Flynn Pharma, broke competition law by charging “unfairly high” prices for phenytoin, which is used by an estimated 48,000 epilepsy patients in the UK to prevent and control seizures.

After the CMA issued a fine of £84.2m, Pfizer’s objections and several years of legal wrangling led the UK watchdog to re-open its investigation this year.

According to the CMA’s provisional view: “As Pfizer and Flynn were the dominant suppliers of the drug in the UK, the NHS had no choice but to pay unfairly high prices for this vital medicine.”

Explaining the decision, CMA chief executive Andrea Coscelli said: “Thousands of patients depend on this drug to prevent life-threatening seizures as a result of their epilepsy.” He added that the matter was “important for government, for the public as patients and taxpayers, and for the pharmaceutical industry itself. Protecting these patients, the NHS and the taxpayers who fund it, is our priority”.

NHS spending on phenytoin sodium capsules rose “overnight” from around £2m a year in 2012 to about £50m in 2013, said the CMA. “For over four years, Pfizer’s prices were between 780% and 1,600% higher than it had previously charged. Pfizer then supplied the drug to Flynn, which sold it to wholesalers and pharmacies at prices between 2,300% and 2,600% higher than those they had paid previously.”

Pfizer and Flynn now have an opportunity to respond to the provisional findings, which the CMA will “carefully consider” to decide whether they broke the law.

The Pfizer/Flynn decision is part of a crackdown on illegal behaviour by drug companies overcharging the NHS. In recent weeks, the CMA has fined several companies linked to Auden Mckenzie and Actavis UK, now known as Accord-UK, a total of £260m for inflating the price of essential drug hydrocortisone, and fined Advanz and its former private equity owners more than £100m for inflating the price of liothyronine, used to treat thyroid hormone deficiency, by up to 6,000%.

A number of other CMA investigations are continuing.