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The Court of Appeal will reconsider whether to reinstate the Competition and Markets Authority (CMA)’s fines on drug companies Pfizer and Flynn Pharma over “excessive” pricing of phenytoin sodium capsules.
The court’s move, detailed in a statement from the CMA published on 19 June 2026, comes after it rejected the Competition Appeal Tribunal (CAT)’s decision to set aside the CMA’s decision.
The CAT is a specialist judicial body that hears cases related to competition regulatory issues.
In its original investigation in 2016, the CMA found that Pfizer and Flynn had used their dominant positions in the market to charge “excessive and unfair prices” for phenytoin sodium capsules (Epanutin) between 2012 and 2016.
Pfizer and its distributor Flynn had increased prices by 2,300–2,600%, which resulted in annual costs to the NHS increasing from £2m in 2012 to approximately £50m in 2013, it said. The investigation concluded that the companies had breached competition law, and the CMA fined them £90m.
Both Pfizer and Flynn challenged this decision at the time, but the tribunal upheld the CMA’s findings, aside from its conclusion that the drug prices were an “unlawful abuse of dominance”.
The tribunal then referred the case back to the CMA for further consideration, known as a ‘remittal’.
Following this, the CMA re-opened the investigation in 2020 and issued a ‘remittal decision’ in 2022, in which it imposed a combined fine of £69m on the parties: £63.3m for Pfizer and £6.7m for Flynn.
Following appeals from both companies, the CAT re-examined the case and determined, as the CMA had, that Pfizer and Flynn had “abused their dominant positions by charging excessive prices for phenytoin sodium capsules between 2012 and 2016” and imposed identical fines to those issued by the CMA to the companies.
“However, it said there were flaws in the CMA’s analysis and replaced the CMA’s reasoning with its own,” the statement said.
Following appeals from both companies to the Court of Appeal, the court said that it had “rejected the CAT’s approach in its entirety”.
“It fully upheld the CMA’s appeal against the CAT, setting aside the CMA’s decision, and found that the CAT had ‘misread, or mischaracterised, the CMA’s decision on critical issues’,” the statement said, adding that it “was ‘wrong’ to set it aside”.
The court’s judgment states: “The CAT found errors in the [CMA’s] decision which, on a fair reading, the CMA did not make.”
“The CAT failed to engage with, or mischaracterised, the CMA’s decision on critical issues” and that “the CAT was wrong to find that the CMA predetermined the outcome … and examined the evidence in a biased and selective way,” it added.
“The CMA set outs its analysis at great length in the decision. We can detect nothing in the CMA’s analysis of prices over time which indicates, or is relevant to, a finding of bias.”
The statement continued: “In relation to Pfizer and Flynn’s appeals, the court concluded that, ‘the CAT’s remade decision was vitiated by procedural unfairness’ and went on to set aside the re-taken decision. It concluded also that, because the CAT was wrong to set aside the CMA’s decision, it had no basis to remake the decision.”
The Court of Appeal will consider further submissions from the parties before deciding whether to reinstate the CMA’s decision and fines, it said.
Commenting on the Court of Appeal’s decision, Juliette Enser, executive director of competition enforcement at the CMA, said: “This is an important judgment from the Court of Appeal. Phenytoin is a vital drug relied on by thousands to prevent life-threatening seizures, and the CMA found that these companies exploited their positions to charge the NHS excessive prices.
“The judgment confirms the CAT was wrong to set aside the CMA’s decision — recognising that our findings were based on a fair and robust assessment of the evidence. We will now make submissions to the court in advance of its further ruling.”
