Stevenage drugs company Flynn Pharma hit with £5.2 million fine by regulators after charging NHS ‘extraordinarily hiked up prices’ for epilepsy medication
- Credit: Archant
A Stevenage pharmaceutical firm has been hit with a £5.2 million fine after hiking the price of epilepsy drugs sold to the NHS by more than 2,600 per cent.
The Competition and Markets Authority yesterday slapped Flynn Pharma – based in Stevenage – with the fine after the NHS splashed out more than £50 million on the phenytoin sodium capsules in 2013.
Before September 2012, American firm Pfizer manufactured and sold the drugs to UK wholesalers and pharmacies under the brand name Epanutin and the prices of the drug were regulated.
But then Pfizer sold the UK distribution rights for Epanutin to Flynn Pharma, which de-branded the drug – meaning it was no longer subject to price regulation.
The amount the NHS was charged for 100mg packs of the drug rocketed from £2.83 to £67.50, before reducing to £54 from May 2014.
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As a result of the price increases, NHS expenditure on the capsules increased from about £2m a year in 2012 to around £50m in 2013.
Phenytoin sodium capsules are used in the treatment of epilepsy to prevent and control seizures, and are an important drug for an estimated 48,000 patients in the UK.
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The final CMA decision and fines relate to both the prices that Pfizer has charged to Flynn Pharma and the prices that Flynn Pharma has charged to its customers since September 2012.
The CMA found both companies held a dominant position in their respective markets for the manufacture and supply of phenytoin sodium capsules, and that each has ‘abused that dominant position’ by charging excessive and unfair prices.
Philip Marsden, chairman of the case decision group for the CMA’s investigation, said: “The companies deliberately exploited the opportunity offered by de-branding to hike up the price for a drug which is relied upon by many thousands of patients.
“These extraordinary price rises have cost the NHS and the taxpayer tens of millions of pounds.
“Businesses are generally free to set prices as they see fit but those holding a dominant position should not abuse this situation and set prices that are excessive and unfair.
“There is no justification for such rises when phenytoin sodium capsules are a very old drug for which there has been no recent innovation or significant investment.
“This is the highest fine the CMA has imposed and it sends out a clear message to the sector that we are determined to crack down on such behaviour and to protect customers, including the NHS, and taxpayers from being exploited.”