Medicines manufacturers have been fined almost £130m after the Competition Appeal Tribunal upheld a finding that a 10,000% increase in the price of hydrocortisone tablets was excessive.
In a ruling published on 18 September 2023, the tribunal upheld the infringement decision made by the Competition and Markets Authority (CMA), issued in July 2021, that Auden/Actavis UK charged “excessive and unfair” pricing for generic hydrocortisone tablets from 2008 to 2018.
Although the fine was slightly reduced by around £26m, the CMA said it was the highest fine that the tribunal had ever upheld.
In a statement published on 18 September 2023 after the tribunal’s ruling, the CMA said its original investigation showed that prices of generic hydrocortisone tablets rose by over 10,000% compared with the original branded version of the drug, meaning the prices paid by the NHS for a pack of 10mg tablets rose from £0.70 in April 2008 to £72.00 by March 2016.
The CMA also found that Auden/Actavis made an illegal profit of at least £145m from growing hydrocortisone prices, according to the statement.
Michael Grenfell, executive director for enforcement at the CMA, said: “This infringement was serious and — in its effects on the NHS, on the cost of patient care, and on taxpayers — shocking.
“Tens of thousands of people rely on hydrocortisone tablets to treat life-threatening conditions, such as Addison’s disease, and following the actions of these companies, NHS spending on this essential medicine rose from around £0.5m a year to over £80m.
“When we announced our decision to fine these firms in 2021, we said that these were some of the most serious abuses we had uncovered in recent years. The tribunal has reached the same conclusions as the CMA, finding ‘an illegitimate exploitation of market power to leverage prices well in excess of what was fair’, and that the businesses involved committed the abuses intentionally.”
In its statement, the CMA also said it had found that Auden Mckenzie and Actavis UK, which took over the Auden business in 2015, had abused their dominant position by charging excessive prices for hydrocortisone tablets. It ruled that Auden had colluded with its potential competitor Waymade to buy off competition on 20mg and 10mg hydrocortisone tablets, and that Auden and later Actavis UK had colluded with another potential competitor, AMCo, to continue buying off competition on 10mg hydrocortisone tablets.
In total, the CMA imposed fines amounting to £266.5m for these infringements, covering its abuse of dominance and its collusion findings.
The tribunal’s judgment deals only with the abuse of dominance findings, which accounted for £155.2m of the original CMA fine, and the tribunal has reserved its judgment in relation to the appeal against the CMA’s findings on collusion.
The tribunal also found that Actavis UK’s former parent Allergan should not have to pay a penalty for the period when it owned Actavis UK subject to ‘hold separate’ commitments because these meant that Allergan did not exercise control over its subsidiary.
The CMA imposed financial penalties for the excessive pricing abuses on Actavis UK (now known as Accord UK), its current parents Intas/Accord and its former parent Allergan.
In a statement, a spokesperson for Accord Healthcare said: “We are very disappointed regarding the judgment of the UK Competition Appeal Tribunal, which upholds the original decision of the CMA.
“Having only inherited the product in January 2017, we have done nothing but continuously reduce the price in the face of significant competition. We are still digesting the judgment and considering all options available to Accord Healthcare.”