UK re-investigates Pfizer's eye-popping price gouging on an epilepsy drug
When a drugmaker raises the price of a drug in the US by more than 2,000% overnight, and without any particular reason for that increase, nothing typically happens to the company. No fines, no court orders, just business as usual.
Martin Shkreli’s decades-old anti-parasitic drug Daraprim was the perfect example — massive price spike on an old drug, lots of media attention, public outcry, congressional committees dragging his former company through multiple hearings, and at the end of it? Nothing happened to the price or the company (until generic competition came).
But when this type of behavior occurs in the UK, as we’re now seeing in this case with Pfizer, regulators are prepared for retribution, and they aren’t afraid to re-open an investigation either.
In this instance, the UK’s Competition and Markets Authority has already, in 2016, imposed a record £84.2 million ($117 million) fine on Pfizer, finding that the company broke competition law by increasing the price of its epilepsy drug phenytoin sodium by 2,600% overnight after the drug was deliberately de-branded in September 2012.
The change meant that the price the UK’s National Health Service was charged for 100mg packs of the drug skyrocketed from £2.83 ($3.94) to £67.50 ($94), resulting in increased expenditures from about £2 million ($2.8 million) in 2012 to about £50 million ($70 million) in 2013.
In 2018, the UK’s Competition Appeal Tribunal (CAT) upheld the CMA’s findings on market definition and dominance, but set aside the CMA’s finding that the companies’ prices were an unlawful “abuse” of dominance.
This latest re-investigation by the CMA, announced Thursday, will wade back into that finding that the CAT set aside.
The CMA has now provisionally found that Pfizer and Flynn Pharma, the company that sold the Pfizer drug to NHS and previously was fined £5.2 million ($7.2 million), exploited a loophole and de-branded the drug – known as Epanutin prior to September 2012 – so that it was not subject to price regulation in the way branded drugs are. As Pfizer and Flynn were the dominant suppliers of phenytoin sodium in the UK, the NHS had no choice but to pay the high prices.
Pfizer and Flynn now have a chance to respond to the CMA’s accusations, and the authority said it will carefully consider their representations before deciding whether they broke the law.