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CMA Accuses Drug Companies Of Collusion

The Competition and Markets Authority (CMA) has accused four drug companies of agreeing not to compete for the supply of anti-nausea and dizziness drug Prochlorperazine 3mg dissolvable tablets (only available on prescription) to the NHS, a move that saw prices paid by the health service climb by approximately 700 per cent.

The CMA alleges that between 2013 and 2018, Focus, Lexon, Medreich and Alliance Pharmaceuticals colluded on non-competition of the supply of the drug. Between 2014 and 2018, the annual costs incurred by the NHS for the medication rose from approximately £2.7 million to about £7.5 million, despite the fact that the number of packs dispensed actually fell.

A provisional finding by the watchdog is that an overarching agreement was entered into by the companies, implemented through two different agreements – one between Focus and Alliance, and one between Focus, Medreich and Lexon.

Lexon and Medreich were paid a share of the profits that Focus earned on the supply of the product, manufactured by Alliance, and agreed not to compete for its supply in the UK.

“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,” CMA senior director of antitrust Ann Pope said.

This isn’t the first time that the CMA has had to deal with a case of this kind – and no doubt it won’t be the last.

Back in February, the organisation also provisionally found that Auden McKenzie and Waymade broke the law by entering into an agreement not to compete for the supply of hydrocortisone tablets in the UK between July 2011 and April 2015.

The CMA believes that because of this alleged anti-competitive behaviour, the NHS was denied a choice of suppliers and possible savings as a result of increased competition.

Between the aforementioned dates, Auden McKenzie was the sole supplier of 20mg hydrocortisone tablets, with charges to the NHS climbing from about £46 to £90 for a pack of 30 tablets. This saw the annual costs incurred by the health service for the medication climb from £1.7 million to £3.7 million.

“Hydrocortisone is a lifesaving drug for those suffering with Addison’s Disease in the UK. The NHS should not be denied the opportunity of benefitting from an increased choice of suppliers and potential savings on what it spends on this essential drug,” executive director for enforcement Michael Grenfell said.

Hydrocortisone tablets are the main form of treatment for people with Addison’s Disease, which is where the adrenal glands don’t produce enough of natural steroid hormones.

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