The Competition Appeal Tribunal has upheld a decision by the Competition and Markets Authority (CMA) to fine drug company Advanz Pharma, and two former owners, for increasing the price of liothyronine by over 1,000%.
Advanz, the only firm that supplied the medicine, which is used to treat thyroid hormone deficiency, increased prices from £20 to £248 per pack between 2009 and 2017. In July 2021, the CMA found that this was excessive pricing, in breach of competition law.
The CMA levied fines of more than £100m on Advanz Pharma, HgCapital and Cinven, two private equity firms that previously owned the businesses now forming part of Advanz.
Publishing its ruling on 8 August 2023, the appeal tribunal upheld the CMA’s decision, but it reduced the penalties imposed by the CMA on two of the appellants (Cinven and HgCapital) by £17.2m in total, reducing the CMA’s overall fine of over £101m to £84.2m.
The tribunal ruled that an uplift in the financial penalties to deter the companies from breaching competition law in the future was unnecessary, and it determined that Advanz Pharma must pay £40.9m; Cinven £37.1m; and HgCapital £6.2m.
In a statement following the appeal tribunal’s ruling, the CMA said that NHS annual spending on liothyronine tablets in 2006, the year before the price was increased, was £600,000, but by 2009 it had increased to more than £2.3m and by 2016 it was £30m, while the quantity prescribed remained stable.
In its July 2021 ruling, the CMA said the price increases had led to liothyronine tablets being placed on “the NHS ‘drop list’ in July 2015”, which led to patients either having their current treatment stopped or having to purchase liothyronine tablets at their own expense.
“That is particularly concerning, given that many patients do not respond adequately to the main treatment for hypothyroidism, levothyroxine tablets — and instead rely on liothyronine tablets to alleviate symptoms such as extreme fatigue and depression,” the statement said.
Commenting on the appeal tribunal ruling, Michael Grenfell, executive director, enforcement at the CMA, said: “We are delighted that the Competition Appeal Tribunal has unanimously upheld the CMA’s infringement findings.
“Today’s landmark judgment reinforces the need for companies to think carefully about how they set prices and paves the way for the NHS to seek compensation.”
A spokesperson for Advanz Pharma said the company was reviewing the tribunal’s decision and did not want to comment further at this point. HgCapital and Cinven both declined to comment.