UK’s CMA Fines Pfizer
US-based multinational pharmaceuticals giant Pfizer has been fined and heavily criticized by the UK’s Competition and Markets Authority (CMA), a decision that is being seen as part of the push-back against pricing practices among generics manufacturers on both sides of the Atlantic.
Pfizer was fined $14,000 for what the CMA described as a flagrant and intentional breach of the UK’s Competition Act, when it failed to meet a deadline for disclosing documents relating to its deal with British company Flynn Pharma.
The request for disclosure came after Pfizer were called to attend an oral hearing at the CMA earlier this year to explain why the price of epilepsy drug Epanutin rocketed shortly after Pfizer sold the expired patent in 2012.
Price Hikes Lead To Investigation
Under the deal, Pfizer continued to manufacture Epanutin, while Flynn Pharma sold it in the UK. Last summer, an investigation by the CMA concluded that Pfizer was selling the drug at a rate between 8 and 17 times higher than its original price, and that Flynn Pharma was then pushing the price up even further.
This price hike led to the UK’s National Health Service (NHS) spending £50 million on the drug in 2013 and £40 million in 2014, compared to an Epanutin spend of around £2.3 million a year prior to the deal.
The CMA had demanded to see evidence relating to the pricing of Epanutin at the time of the deal, a request which Pfizer failed to comply with in time. Although the fine of $14,000 is not significant for a company with an annual turnover of $1.73 billion, it is not the end of the process. Later this year, the CMA will rule on whether Pfizer abused its market position, and could impose a fine of 10% of the company’s global turnover, which could amount to over $4.5 billion.
The CMA action comes in the same period that the Senate launched investigations into several US companies over alleged ‘price-gouging’, and reflects the increasingly hostile mood of authorities and politicians on both sides of the Atlantic to some pricing practices in the generic pharmaceuticals industry.
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