Pfizer, Flynn accused of charging the NHS 'unfairly high prices' for anti-epilepsy drug

Pfizer and Flynn have been accused of breaking competition law by overcharging the NHS for ‘vital’ anti-epilepsy drugs, according to provisional findings from the UK Competition and Markets Authority (CMA).

In December 2016, the CMA fined both Pfizer and Flynn for breaking competition law by charging unfairly high prices for phenytoin sodium capsules – sold under the brand name Epanutin prior to September 2012.

Subsequently, the companies appealed the CMA decision – although the Competition Appeal Tribunal (CTA) upheld the CMA’s findings on market definition and dominance in 2018, it set aside the CMA’s finding that the companies prices for the drug were an unlawful ‘abuse’ of dominance.

Following this, the CMA and Flynn appealed to the Court of Appeal, with the Court finally dismissing Flynn’s appeal in its entirety and upholding aspects of the appeal brought by the CMA in March 2020, relating to the application of the legal test for unfair pricing.

The CMA then decided to re-investigate the case – particularly the matters remitted by the CMA – opening its current investigation in June 2020.

After ‘carefully’ reassessing the case, the CMA has provisionally found that Pfizer and Flynn ‘exploited a loophole’ by de-branding the drug, meaning the drug was not subject to price regulation in the same way that branded drugs usually are.

Because of this, Pfizer and Flynn remained the dominant suppliers of the drug in the UK, with the NHS having ‘no choice’ but to pay the ‘unfairly high prices’ for the medicine.

According to the CMA, NHS spending on the drug rose from approximately £2m a year in 2012 to around £50m in 2013, with Pfizer’s prices for the medicine between being 780% and 1,600% higher than it had previously charged for over four years.

Pfizer then supplied he drug to Flynn, which went on to sell it to wholesalers and pharmacies at prices between 2,300% and 2,600% higher than those they had paid previously, said the CMA.

“Thousands of patients depend on this drug to prevent life-threatening seizures as a result of their epilepsy,” said Andrea Coscelli, chief executive of the CMA.

“As the CAT recognised, this is a matter that is important for government, for the public as patients and taxpayers, and for the pharmaceutical industry itself. Protecting these patients, the NHS and the taxpayers who fund it, is our priority,” he added.