Pharma firms fined Â£35m for illegal prochlorperazine deal
The Competition and Markets Authority has fined four pharmaceutical companies a total of more than £35m for an illegal ‘pay for delay’ deal that saw NHS spending on prochlorperazine rise by 700 per cent.
The CMA found that between June 2013 and July 2018 Alliance Pharmaceuticals, Focus and Lexon broke competition law through a deal concerning the supply of prochlorperazine 3mg dissolvable tablets to the health service.
The arrangement saw Alliance Pharmaceuticals appoint Focus as its distributor, with Lexon and Medreich receiving a share of Focus’s profits in return for agreeing not to enter the market with their competitor product.
Both companies had been preparing to launch a prochlorperazine product they had developed jointly.
Medreich, which was party to the illegal arrangement for four years from February 2014, obtained a supply licence in January 2014 but did not “supply commercial volumes” during the infringement period.
According to the CMA, between December 2013 and December 2017 the prices paid by the NHS rose by 700 per cent, with its total prochlorperazine spend rising almost threefold to £7.5m over a four-year period despite fewer packs being dispensed.
The CMA has issued a £7.9m fine to Alliance Pharmaceuticals, a £7.3m fine to Lexon, a £4.6m fine to Medreich and a £15.5m fine to Focus, divided between its current and previous owners Advanz and Cinven.
Medreich’s fine was reduced by 40 per cent after admitting its involvement and cooperating with the CMA investigation.
CMA chief Andrea Coscelli commented: “The size of the fines reflects the seriousness of this breach. These firms conspired to stifle competition in the supply of this important medication, so that the NHS – the main buyer of the drugs – lost the opportunity for increased choice and lower prices.
“While the arrangement was in place, the price increased significantly for a drug that people rely on to manage debilitating nausea, dizziness and migraines.
“All firms should know that we will not hesitate to take action like this against any businesses that collude at the expense of the NHS.”
Both Advanz and Cinven are appealing separate CMA fines concerning other investigations.