Markets watchdog imposes record fine for breaches of competition law

The UK’s Competition and Markets Authority (CMA) has imposed fines totalling almost £90 million on Pfizer and Flynn Pharma for breaching competition law. The penalties relate to ‘excessive and unfair’ price increases for anti-epilepsy drug phenytoin.

Pfizer had manufactured and sold phenytoin (branded as Epanutin) directly to pharmacies and wholesalers at a regulated price. Flynn bought the UK distribution rights in 2012 and de-branded the drug, freeing it from pricing regulations. Pfizer then sold capsules to Flynn for 8–17 times their historic price, while Flynn sold the products on to customers at prices 27 times higher than previous levels.

Following the deal total NHS spend on the drug soared from £2 million in 2012 to £50 million in 2013. Around 50,000 people in the UK rely on the medication to prevent and control seizures.

Off-patent drug pricing has become a contentious subject in pharma, and Pfizer’s £84.2 million fine is the largest ever issued to a pharmaceutical company by the CMA.

Both companies intend to appeal the decision. Pfizer stated that, prior to the deal with Flynn, phenytoin sodium was a loss-making product (which the CMA recognises, but claims any losses were recouped within two months of the price increase). Pfizer said that it ‘believes the CMA’s findings are wrong in fact and law’.