CMA accuses three drugs firms of illegal market sharing

Healthcare | Legal | South East
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The CMA has provisionally found that three drug firms signed an illegal agreement that resulted in significant price hikes for essential medicine.

In a Statement of Objections to be issued today, the Competition and Markets Authority (CMA) sets out its provisional view that, in 2016, pharmaceutical company Aspen unlawfully agreed to pay 2 other firms, Amilco and Tiofarma, to stay out of the UK market for fludrocortisone acetate tablets. This is a prescription-only medicine that thousands of patients rely on to treat primary or secondary adrenal insufficiency, commonly known as Addison’s Disease.

This alleged illegal agreement protected Aspen’s UK monopoly in relation to the supply of the drug to the NHS and gave the firm the opportunity to increase prices by up to 1,800%.

The CMA has provisionally found that Tiofarma and Amilco colluded with Aspen by agreeing to stay out of the market so that Aspen could maintain its position as the sole UK supplier of fludrocortisone. In exchange, it is alleged that Tiofarma was made the sole manufacturer of fludrocortisone for direct sale in the UK, and Amilco received a 30% share of the increased prices that Aspen was able to charge.

The Statement of Objections follows Aspen’s admission, in August 2019, that it took part in this allegedly anticompetitive arrangement. Should the CMA ultimately conclude that there has been an infringement, Aspen has also agreed to a maximum penalty of £2.1m. Amilco and Tiofarma have made no admission.

The CMA has also today formally accepted Aspen’s offer of commitments, to resolve a related competition concern relating to Aspen’s 2016 purchase of a competitor fludrocortisone product from Tiofarma authorised for supply in the UK. This acquisition brought all existing fludrocortisone marketing authorisations in the UK permanently under Aspen’s ownership.

These commitments include Aspen, for the first time as part of such a package, offering to pay the NHS £8 million, as well as ensuring that, in the future, there will be at least two suppliers of fludrocortisone in the UK to help the NHS access more competitive prices.

With today’s acceptance of the commitments, following a public consultation, this aspect of the CMA investigation has ended and the NHS will receive the £8m from Aspen within 20 working days.

Michael Grenfell, Executive Director, Enforcement, at the Competition and Markets Authority, said: “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.

“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.

The CMA is also pleased formally to accept Aspen’s £8m payment to the NHS in response to competition concerns about a related arrangement they made for supplying this medicine, which the NHS will receive in 20 working days. This highlights the importance of competition in making sure the NHS, and so ultimately UK taxpayers, do not pay more than they should for medicines.”

Amilco and Tiofarma now have the opportunity to respond to the CMA’s provisional findings. No assumption should be made that Amilco and Tiofarma have infringed the law.

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