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Pharma firm fined £100m after hiking drug prices by 6,000%

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Written by: Emma Lunn
29/07/2021
The Competition and Markets Authority (CMA) has fined pharmaceutical company Advanz and its private equity owners more than £100m after it was found to have inflated the price of thyroid tablets.

Following an investigation, the CMA found that from 2009 until 2017 Advanz charged excessive and unfair prices for supplying liothyronine tablets which are used to treat thyroid hormone deficiency. Advanz increased the price of thyroid tablet packs from £20 in 2009 to £248 in 2017 – an increase of 1,110%.

It achieved this because liothyronine tablets were among a number of drugs that, although genericised, faced limited or no competition and therefore could sustain repeated price increases. This strategy, which began in 2007, involved an overall price increase for liothyronine tablets of more than 6,000%.

The competition watchdog said the fine “sends a clear message” to the pharma sector that breaking the law will not be tolerated.

The CMA has fined the firms involved a total of more than £100m for the relevant periods in which they broke the law. Advanz was fined £40.9m, while private equity firms HgCapital and Cinven, who were owners of the business at the time, were fined £8.6m and £51.9m respectively.

The CMA said the price increases were not driven by any meaningful innovation or investment, volumes remained broadly stable, and the cost of producing the tablets did not increase significantly.

NHS spending on the tablets in 2006, the year before the implementation of the strategy, was £600,000, but by 2009 had increased to more than £2.3m and jumped to more than £30m by 2016.

Eventually the drug was placed on the NHS ‘drop list’ in July 2015. This led to patients being faced with the prospect of having their current treatment stopped or having to purchase liothyronine tablets at their own expense.

The CMA said that was 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.

Andrea Coscelli, chief executive of the CMA, said: “Advanz’s decision to rachet up the price of liothyronine tablets and impose excessive and unfair prices for over eight years came at a huge cost to the NHS, and ultimately to UK taxpayers. But that wasn’t all – it also meant that people dealing with depression and extreme fatigue, as a result of their thyroid conditions, were told they could not continue to receive the most effective treatment for them due its increased price.

“Advanz’s strategy exploited a loophole enabling it to reap much higher profits. This fine of over £100m, and our work in the pharma sector to date, sends a clear message that breaking the law has serious consequences.”

The investigation into these firms is part of the CMA’s ongoing work in the pharmaceutical sector. Recent action includes securing an £8m repayment to the NHS after companies took part in illegal arrangements relating to the supply of fludrocortisone, and fining firms £260m for competition law breaches in relation to the supply of hydrocortisone tablets. A number of other CMA investigations are continuing.

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