Drug pricing has become a hot-button issue on both sides of the pond, and late this week, the U.K. dished out another fine taking aim at "unfair" inflation.
Hoping to send the pharma industry a “clear message” on anticompetitive marketing tactics, the U.K.’s Competition and Markets Authority (CMA) on Thursday slapped Advanz Pharma with more than £100 million ($139.6 million) in fines for hiking the price of its thyroid disease tablets by 1,110%.
A CMA investigation found Advanz raised the price of its liothyronine tablets from £20 (around $29) in 2009 to £248 ($345) in 2017. Advanz’s pricing of the drug, which is used to treat thyroid hormone deficiency, was “excessive and unfair,” the CMA found.
Liothyronine tablets are off-patent but face “limited” to “no competition” from other companies, which helped facilitate Advanz’s pricing strategy, authorities said.
There was no “meaningful” innovation or investment to support the company's so-called price optimization strategy, the CMA said. The cost to make liothyronine tablets didn’t tick up “significantly" during the period, the agency added.
The U.K.’s National Health Service (NHS) spent £600,000 ($834,375) on liothyronine tablets in 2006, which the CMA flagged as the last year before Advanz’s price-hiking strategy took flight. By 2009, the NHS was paying more than £2.3 million (about $3.2 million), with the number jumping to more than £30 million ($41.71 million) by 2016.
In July 2015, Advanz’s drug founds its way to the NHS’ “drop list,” which meant patients were at risk of having their current treatment stopped or having to pay for their medication out of pocket. To make matters worse, many hypothyroidism patients don’t respond well to another treatment, levothyroxine tablets, making liothyronine tablets a crucial alternative, the CMA said.
Advanz faces £40.9 million in fines, while former private equity owners HgCapital and Cinven are on the hook for £8.6 million and £51.9 million, respectively.
It’s the CMA’s second pricing-related fine this month after authorities in mid-July issued more than £260 million ($360 million) in fines to a clutch of drugmakers for inflating the cost of generic hydrocortisone tablets.
In that case, officials homed in on Auden Mckenzie and Actavis UK, which now goes by Accord-UK, which they say charged the U.K.'s health system “excessively high prices” on their tablets for nearly a decade. From 2008 to 2016, the price of hydrocortisone tablets grew by 10,000%, authorities said.
Advanz and Cinven were also implicated in the hydrocortisone scheme and were ordered to pay £43 million two weeks back.