Watchdog fines Pfizer and Flynn £70m for overcharging NHS for epilepsy drug

theguardian.com:

The drugmakers Pfizer and Flynn Pharma have been fined a total of £70m for overcharging the NHS for a life-saving epilepsy drug.

The UK’s competition watchdog fined New York-based Pfizer £63m and imposed a £6.7m penalty on Flynn, a smaller UK pharmaceutical firm based in Stevenage. Both companies said they would appeal.

The fines are the result of an in-depth investigation carried out by the Competition and Markets Authority (CMA), which concluded that Pfizer and Flynn charged “unfairly high prices” for phenytoin sodium capsules for more than four years.

The firms de-branded the drug, previously known as Epanutin, and sold it as a generic. That meant it was no longer subject to price regulation and they could set prices at their discretion.

The CMA said because Pfizer and Flynn were the dominant suppliers of the drug in the UK at the time, the NHS had no choice but to pay the inflated price for the important anti-epilepsy medicine.

Over the following four years, Pfizer charged prices between 780% and 1,600% higher than previously. The company supplied the drug to Flynn, which then sold the capsules on to wholesalers and pharmacies at a price between 2,300% and 2,600% higher than the prices previously charged by Pfizer.

This led to annual NHS costs for phenytoin capsules ballooning from £2m in 2012 to about £50m the following year.

The CMA had issued an infringement decision in December 2016, finding that the companies’ behaviour broke competition law, which was challenged by Pfizer and Flynn in a lengthy appeal process. In March 2020, the court of appeal dismissed Flynn’s appeal in its entirety and the CMA reinvestigated the matter.

Andrea Coscelli, the CMA’s chief executive, said: “Phenytoin is an essential drug relied on daily