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Drug pricing

CMA warns drug companies against using discount schemes to maintain market dominance

The Competition and Markets Authority (CMA) has warned drug companies against using anticompetitive discount schemes, after investigating discounts offered by the company that manufactures Remicade.

The CMA found that there were “no grounds for action” following its investigation into discounts made by Merck Sharp & Dohme Limited (MSD) for Remicade (infliximab), a drug used to treat chronic illnesses such as Crohn’s disease and rheumatoid arthritis.

In May 2017, the CMA said that the scheme, which was introduced in 2015 after the patent for the drug expired, “was in breach of competition law”, but added in a press release on 14 March 2019 that further evidence indicated “that MSD’s scheme was not, in practice, likely to limit competition from others”.

“This is because, at the time that the discount scheme was introduced, the market worked differently from the way MSD had envisaged when it designed the scheme,” the CMA said.

The day after the patent for Remicade expired in 2015, a biosimilar version was launched in the UK.

The CMA said: “If [the discount scheme] had been successful, MSD’s discount scheme could have delayed the NHS from benefitting from increased competition and making significant savings on what it spent on Remicade, which, at the time, was over £100m annually.”

Despite the conclusion, the CMA has said the investigation “serves as a warning to businesses, which design discount schemes to protect their dominant market position, that they risk breaching UK competition law”.

It added that had MSD’s scheme worked to prevent or limit competition, “the company could have faced severe financial penalties”.

Citation: The Pharmaceutical Journal DOI: 10.1211/PJ.2019.20206300

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