Post by icemandios on Jul 21, 2022 19:32:32 GMT
July 21, 2022 02:16 PM EDT PharmaNHS watchdog imposes $84M fine on Pfizer, Flynn Pharma in newest development of price-gouging saga
Paul Schloesser
Associate Editor
Ten years after two companies allegedly started to price gouge the UK healthcare system, another fine has been levied.
The UK government put out word Thursday that Pfizer and UK biotech Flynn Pharma were fined 70 million pounds ($84 million) by the country’s antitrust watchdog for overcharging the National Health Services (NHS) for epilepsy drug Epanutin.
And there’s some history here. The Competition and Markets Authority (CMA) had originally fined Pfizer and Flynn close to 90 million pounds in 2016 for inflating prices for Epanutin by as much as 2,600% — rivaling Martin Shkreli’s infamous 2015 price hike of Daraprim by 5,000%.
It got started in 2012 after the two companies intentionally de-branded the drug and started to set their own price. Over the next four years, Pfizer charged prices between 780% and 1,600% higher than normal — then after supplying the drug to Flynn, it sold the capsules to wholesalers and pharmacies at an even higher price. The UK government said in a statement Thursday that the price jumps increased NHS’s yearly costs for the drug from two million pounds all the way to 50 million pounds in just one year.
The CMA found that the companies violated competition law in 2016 — and the companies immediately appealed the decision to the Competition Appeal Tribunal. That tribunal, while upholding CMA’s definitions of market definition and dominance, set aside its conclusion that the price increases were an “unlawful abuse of dominance” and referred the matter back to the watchdog. After an appeal from both the CMA and Flynn to the Court of Appeal, the court dismissed Flynn’s appeal in March 2020 and upheld certain aspects of the CMA’s appeal.
The CMA opened another investigation the following June — finally determining that “the companies’ behaviour was an abuse of their dominant positions in their respective markets and that both Pfizer and Flynn charged unfair prices for phenytoin capsules.”
UK re-investigates Pfizer's eye-popping price gouging on an epilepsy drug
CMA’s chief executive Andrea Coscelli said in a statement that this kind of behavior “will not be tolerated, and the companies must now face the consequences of their illegal action.”
Pfizer disagreed with the ruling — saying it will appeal the decision. Furthermore, a Pfizer spokesperson told Endpoints News:
As we have consistently stated throughout this process, ensuring a sustainable supply of our products to UK patients is of paramount importance to us and was at the heart of our decision to divest phenytoin capsules to Flynn Pharma in 2012. The Competition Appeal Tribunal and the Court of Appeal both ultimately found in Pfizer’s favour in respect of the CMA’s original decision, which was set aside together with the associated fine. We maintain that we approached this divestment, as with all our business operations, with integrity and believe it fully complies with established competition law.
