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Drug pricing

NHS denied £2m of savings after hydrocortisone suppliers enter anticompetitive agreements, finds CMA

Auden Mckenzie and Waymade have been provisionally found to have broken competition law, the UK’s Competition and Markets Authority has found.

The NHS was denied potential savings on hydrocortisone tablets after two suppliers entered into anticompetitive agreements, the Competition and Markets Authority (CMA) has provisionally found.

From July 2011 to April 2015, Auden Mckenzie remained the sole supplier of 20mg hydrocortisone tablets, despite Waymade, another supplier, being ready to enter the market in May 2011 with the same tablets.

Instead, the CMA found that Waymade froze its stock and struck a deal with Auden Mckenzie to receive monthly payments in return for delaying its entry into the market.

The CMA found that between 2011 and 2015 the price of 20mg hydrocortisone tablets increased from around £46 to £90 for a pack of 30 tablets, increasing the annual costs incurred by the NHS for the medicine from £1.7m to £3.7m.

According to the CMA’s provisional findings, Waymade also obtained a licence to sell 10mg hydrocortisone tablets in September 2012 and, in exchange for Waymade not entering the market, Auden Mckenzie allegedly lowered the price it charged Waymade from the market rate of around £32 per pack to £1.

Michael Grenfell, the CMA’s executive director for enforcement, said: “The CMA has today provisionally found that Auden Mckenzie and Waymade broke competition law through Auden Mckenzie paying its rival to stay out of the market.

“Hydrocortisone is a life-saving drug for those [living] with Addison’s Disease in the UK. The NHS should not be denied the opportunity of benefitting from an increased choice of suppliers and potential savings on what it spends on this essential drug.”

Vijay Patel, the director of Waymade and a pharmacist, was awarded an OBE in the New Year’s Honours list for his services to business and philanthropy.

Following this provisional finding, the companies will now be able to state their case to the CMA before it reaches a final decision.

Citation: The Pharmaceutical Journal DOI: 10.1211/PJ.2019.20206236

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