Pfizer fined for excessive prices

Pharmaceutical company Pfizer has been fined a record £84.2m for charging excessive and unfair prices in the UK for an anti-epilepsy drug.

The Competition and Markets Authority (CMA) also fined the distributor Flynn Pharma £5.2m, after finding that each company broke competition law for the drug, phenytoin sodium. The CMA has ordered the companies to reduce their prices.

In September 2012, the price increased by 2,600% overnight, when the company de-branded (or genericised) the product. This meant the NHS was charged £67.50 rather than £2.83 for 100mg packs of the drug, before the price decreased to £54 in May, 2014. Some 48,000 patients in the UK use the drug to control seizures, and cannot easily switch to another medicine.

The CMA found that both companies held a dominant market position, and that each abused that position.

Philip Marsden, chairman of the case decision group for the CMA’s investigation, said: “This is the highest fine the CMA has imposed and it sends out a clear message to the sector that we are determined to crack down on such behaviour and to protect customers, including the NHS, and taxpayers from being exploited.”

Gustaf Duhs, head of competition and regulatory at Stevens & Bolton, said: “It is very rare for competition regulators to take action in respect of excessive prices because it is very hard to define when a price becomes excessive, and because in a competitive market excessive prices are unsustainable (an increase in price will lead to a loss in market share).”