The Competition and Markets Authority (CMA) has accused four pharmaceutical companies of breaking the law and colluding over the supply of anti-nausea drug Prochlorperazine in the UK.
The organisation alleges in a statement of objections that between 2013 and 2018 Focus, Alliance Pharmaceuticals, Medreich and Lexon reached an agreement not to compete for the supply of the prescription-only drug to the NHS.
Prices paid by the NHS for the drug climbed by approximately 700 per cent between 2013 and 2017, with the price of a pack of 50 tablets rising from £6.49 to £51.68. This meant that between 2014 and 2018, the NHS incurred annual cost increases from about £2.7 million to approximately £7.5 million, despite the fact that the number of packs dispensed dropped.
A CMA investigation has provisionally found that the four companies collaborated through two separate agreements, one between Focus, Lexon and Medreich, and the other between Alliance Pharmaceuticals and Focus.
Alliance supplied the drug exclusively to Focus, which then paid Lexon a share of the profits earned on the onward sales of Prochlorperazine. Lexon then shared these payments with Medreich.
CMA senior director of antitrust Ann Pope said: “Agreements, where a company pays a rival not to enter the market, can lead to higher prices and deprive the NHS of huge savings that often result from competition between drug suppliers.
“The NHS should not be denied the opportunity of benefitting from an increased choice of suppliers, or lower prices, for important medicine.”
Competition law is intended to protect both businesses and consumers from anti-competitive behaviour, safeguarding effective competition so as to create open and dynamic markets, while enhancing innovation, productivity and value for customers.
Research carried out last year revealed that the majority of businesses are indeed aware of anti-competitive behaviours, such as the fact that price fixing with other firms can result in imprisonment and that it can be against the law to attend meetings where competitors agree on prices.
Interestingly, the proportion of companies putting on training sessions and having discussions at senior level regarding this side of the law remains the same as it was four years ago, with six per cent saying training sessions have taken place in the last 12 months and 18 per cent saying senior-level discussions have been held.
And 68 per cent admitted that they have poor awareness of the penalties that non-compliance with competition law could result in, consistent with the result seen four years ago.
Anyone aware of anti-competitive behaviour or market issues can notify the CMA, filling out a form online and emailing it to the organisation about any concerns. Unless indicated otherwise, the CMA will assume that the information provided is intended to be used as the organisation sees fit and is to be shared or disclosed as far as is necessary, following legal requirements.
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