CMA accuses Pfizer and Flynn Pharma of overcharging

The UK Competition and Markets Authority (CMA) today issued a statement of objections to the pharmaceutical suppliers Pfizer and Flynn Pharma alleging that they have breached competition law by charging excessive and unfair prices in the UK for phenytoin sodium capsules, an anti-epilepsy drug.

Phenytoin sodium capsules are used in the treatment of epilepsy in order to prevent and control seizures and are an important drug for over 50,000 patients in the UK. Pfizer manufactures phenytoin sodium capsules and supplies them to Flynn Pharma, which then distributes them to UK wholesalers and pharmacies. The statement of objections concerns both the prices that Pfizer has charged to Flynn Pharma and the prices that Flynn Pharma has charged to its customers, since September 2012.

Flynn Pharma sold drug at prices 25 to 27 times higher than those historically charged by Pfizer

Prior to September 2012, Pfizer manufactured and sold phenytoin sodium capsules to UK wholesalers and pharmacies under the brand name Epanutin®. Pfizer sold the UK distribution rights for Epanutin to Flynn Pharma, which de-branded the drug and started selling its version in September 2012. Pfizer continued to manufacture the drug, which it sold to Flynn at prices that were significantly higher than those at which it had previously sold Epanutin® in the UK – between 8 and 17 times Pfizer’s historic prices. Flynn then sold the drug on to customers at prices which were between 25 and 27 times higher than those historically charged by Pfizer.

Prior to September 2012, the NHS spent approximately £2.3 million on phenytoin sodium capsules annually. This spend (paid to Flynn and other suppliers of phenytoin sodium capsules) was just over £50 million in 2013 and over £40 million in 2014.

Ann Pope, CMA Senior Director of Antitrust Enforcement, said, “While businesses are generally free to set prices as they see fit, those that hold a dominant position have a special responsibility to ensure that their conduct does not impair genuine competition and that their prices are not excessive and unfair. The prices that the CMA is concerned about in this case are very high compared to those prices previously charged and have led to a big increase in the total NHS drug bill for what is a very important drug for tens of thousands of patients.

“The CMA’s findings on dominance and abuse are provisional and no conclusion can be drawn at this stage that there has, in fact, been any breach of competition law. We will carefully consider any representations from Pfizer and Flynn Pharma before deciding whether the law has been infringed.”