Pfizer hit with record fine in UK for drug price hike
- Pfizer and drug distributor Flynn Pharma were fined nearly £90 million (about $113 million) by the U.K.'s Competition and Markets Authority for charging "excessive and unfair prices" for an anti-epilepsy drug, the consumer authority said Wednesday.
- The CMA hit Pfizer with a record fine of £84.2 million, while Flynn was fined £5.2 million (the statutory maximum fine is capped at 10% of worldwide turnover).
- After Pfizer sold the distribution rights to Epanutin (phenytoin sodium) to Flynn in September 2012, the price of the drug skyrocketed an estimated 2,600%, according to the regulator.
Usually a drug becoming generic means prices drop. In this case, the reverse happened. When Pfizer sold Flynn the rights to Epanutin in 2012, Flynn "de-branded' the drug. This meant the now generic phenytoin sodium no longer fell under the U.K.'s price regulation.
Overnight, prices for the drug shot up by as much as 2600%. Pfizer continued manufacturing phenytoin sodium, selling Flynn the drug at prices between 780% and 1600% higher than the price Pfizer previously charged for Epanutin, the CMA said.
In a statement obtained by Bloomberg, Pfizer refuted the CMA's findings and said it would appeal.
Flynn in turn then sold the drug to wholesalers and pharmacies in the UK at prices between 2300% and 2600% higher than before the transfer of rights.
"The companies deliberately exploited the opportunity offered by de-branding to hike up the price for a drug which is relied upon by many thousands of patients. These extraordinary price rises have cost the NHS and the taxpayer tens of millions of pounds," said Philip Marsden, chairman of the CMA group in charge of the investigation.
Due to the price increases, annual spending by the U.K. National Health Service on the drugs rose from £2 million in 2012 to £50 million in 2013.
The CMA estimated 48,000 patients in the U.K. take phenytoin sodium to control epilepsy symptoms.
In addition to the fines, the CMA ordered both Pfizer and Flynn to reduce their prices for the drug.
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