Pfizer wins appeal of £84M fine in U.K. over 2,600% price hike

Pfizer sign
Pfizer prevailed in appeals in a U.K. competition case over a 2,600% price hike. (Tracy Staton)

After receiving a record fine from competition authorities in the U.K. over a drug price hike, the company's move to appeal has paid off. Pfizer won an appeal of a case tied to a 2,600% price hike on an epilepsy drug.

The case involves Pfizer and distributor Flynn Pharma. The U.K.'s Competition and Markets Authority previously fined the companies a total of £90 million after it ruled they charged unfair prices through a scheme to "debrand" the med. Pfizer's share of the fine was £84 million ($112 million).

CMA argued that Pfizer's epilepsy drug Epanutin was under price controls as a branded medication, so the company licensed the drug to Flynn Pharma, which could sell it as a generic, and jacked up the price by 2,600%. Under a supply agreement, Pfizer manufactured the med, and CMA said Flynn paid Pfizer more than the drug giant could charge for its branded version. According to authorities, the price increased overnight to £67.50 from £2.83 for an 84-pack of 100mg capsules.

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Now, the Competition Appeal Tribunal has ruled (PDF) that CMA's decision was flawed. The tribunal said CMA "did not correctly apply the legal test for finding that prices were unfair" and remitted the decision back to the CMA for further consideration.

RELATED: U.K. watchdog smacks Pfizer with record fine, citing a 2,600% price hike

Pfizer responded that it was "pleased" with the decision.

"Our priority has always been to ensure a sustainable supply of our medicines to U.K. patients and this was at the heart of our decision to divest this medicine," the company said in a statement.

CMA, for its part, said it's considering an appeal. The agency has several pharmaceutical reviews underway that it says may now be "severely delayed." Meanwhile, the U.K.'s National Health Service stands to overpay for high-priced drugs as the investigations play out, according to the agency.

RELATED: Pfizer appeals record fine from U.K. regulator tied to 2,600% drug price hike

Pfizer isn't the only pharma player to come under CMA's antitrust lens in recent years. Last year, the agency found that Merck struck illegal deals to protect Remicade against biosim competition. The same issue has led to a closely watched lawsuit in the United States from Pfizer against Johnson & Johnson, which markets Remicade in the key market.

Aside from that case, CMA fined previously GlaxoSmithKline £37.6 million ($50 million) for pay-for-delay deals, and the appeals tribunal upheld the decision in March. Additionally, Actavis and Concordia came under fire last year for alleged "anticompetitive" deals and a 12,000% price hike on hydrocortisone tablets.