CMA provisionally accuses Alliance Healthcare of breaking competition law over antibiotic supply

The Competition and Markets Authority has provisionally accused Alliance Healthcare, Advanz Pharma Services and Morningside of breaking competition law.

Nitrofurantoin

A drug wholesaler and two drug supply companies have been accused by the Competition and Markets Authority (CMA) of deliberately keeping the cost of an antibiotic high, in breach of competition law.

The allegations involve the wholesaler Alliance Healthcare, and the suppliers AMCo — now Advanz Pharma Services Limited — and Morningside, and centre on the price charged to the NHS for nitrofurantoin 50mg and 100mg capsules which are prescribed from the treatment of a urinary tract infection.

The CMA alleged, in its provisional findings, that the two suppliers shared commercially sensitive information about the price of the drug with the intention of reducing competition from 2014 until at least October 2017.

It added that wholesaler Alliance Healthcare — part of the Walgreens Boots Alliance — allegedly agreed to buy equal volume of nitrofurantoin from the two suppliers so that they would not compete. In 2015 and 2016 the suppliers also agreed to supply the drug exclusively to Alliance Healthcare, according to the CMA.

Details in the CMA’s statement of objections, published on 25 July 2019, said that the arrangements may have prevented or restricted competition because it would have expected the drug price to fall when Morningside began to supply the product.

Ann Pope, senior director of antitrust at the CMA, said: “We’ve provisionally found that suppliers of this important antibiotic entered into arrangements with the aim of keeping nitrofurantoin prices artificially high, meaning the NHS wouldn’t benefit from the lower prices that come from effective competition.”

The CMA’s provisional findings were rejected by all three companies.

Alliance Healthcare said in a statement to The Pharmaceutical Journal: “We take competition law very seriously and do not believe that competition law has been infringed.

“We will review the CMA’s provisional position, as specified in its statement of objections, and we plan to respond in detail to these allegations and defend our position whilst working constructively with the CMA.”

Advanz said that the allegations pre-date its ownership of the product, which it acquired as part of a business deal in October 2015. It added, similarly: “We take competition law very seriously and do not believe that competition law has been infringed. We will review the CMA’s preliminary position, as specified in its [statement of objections], and we plan to respond in detail as we continue to work constructively with the CMA.”

Morningside stated: “While Morningside Pharmaceuticals and Morningside Healthcare (Morningside) strongly refute the concerns raised by the CMA … we will continue to work constructively with them to demonstrate Morningside’s commitment to patient choice and a competitive market.”

Another ten companies have also been made subject to the statement of objections because they are either parent companies of the three accused organisations and/or exercised decisive influence to the three companies directly involved in the allegations.

The CMA investigation is ongoing pending its final decision.

 

  • This article was amended on 26 July 2019 to clarify that the allegations centre on the price charged to the NHS for nitrofurantoin 50mg and 100mg capsules
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Citation
The Pharmaceutical Journal, CMA provisionally accuses Alliance Healthcare of breaking competition law over antibiotic supply;Online:DOI:10.1211/PJ.2019.20206863