Dive Brief:
- The U.K. government's Competition and Markets Authority found Concordia International Corp. to have increased the price of liothyronine, a now-generic drug used to treat a subgroup of patients with hypothyroidism, by nearly 6,000% over ten years.
- In 2007, before going off patent, liothyronine tablets cost £4.46 ($5.92) a pack. By July 2017, however, the price stood at £258.19 ($342.81). As a result, the National Health Service paid over £34 million for the drug in 2016, compared with roughly £600,000 in 2006.
- The CMA's statement of objections is not only being addressed to Concordia. Cinven and HgCapital, private equity firms and previous owners of entities now forming part of Concordia, also are involved. The CMA can levy a fine of up to 10% of a company's worldwide annual turnover if an infringement is found to have occurred.
Dive Insight:
Price gouging isn't just a U.S. issue — it's happening in the UK as well, and for similar reasons too. Once a drug goes generic, prices are usually driven down due to competition. However, when there are few suppliers, as is the case with Concordia and liothyronine, prices can steadily rise.
Theoretically, another drugmaker could come in to undercut a sole supplier, but — as Concordia and other recent cases in the U.K. and U.S. have shown — that doesn't always happen.
The investigation into Concordia was opened in October 2016 to look into "alleged excessive and unfair pricing with respect to liothyronine tablets." Liothyronine is a synthetic form of the thyroid hormone triiodothyronine.
"Pharmaceutical companies which abuse their position and overcharge for drugs are forcing the NHS — and the UK taxpayer — to pay over the odds for important medical treatments," said Competition and Markets Authority CEO Andrea Coscelli. "We allege that Concordia used its market dominance in the supply of liothyronine tablets to do exactly that."
The CMA's findings remain provisional and Concordia has the opportunity to make its case.
"We do not believe that competition law has been infringed," Concordia said in a statement. "The pricing of liothyronine has been conducted openly and transparently with the Department of Health in the UK over a period of 10 years."
The CMA recently went after Pfizer Inc. and its drug distributor Flynn Pharma for a similar breach, which resulted in a record fine of nearly £90 million (about $113 million) for charging "excessive and unfair prices." The drug concerned was an epilepsy medication called Epanutin (phenytoin sodium), the price of which had shot up by roughly 2,600%. The CMA's decision is under appeal in that case.
Elsewhere, the authority is currently pursuing seven investigations into several companies in relation to drug pricing and competition issues.
Editor's note: This article has been updated.