The Competition and Markets Authority (CMA) issued a statement of objections on 9th August 2017 against Intas Pharmaceuticals Limited and its subsidiary Accord Healthcare Limited (which acquired Actavis UK) for suspected breaches of U.K and E.U competition laws.
The CMA believes that the two companies are charging excessive and unfair prices for hydrocortisone tablets, therefore breaking competition law and affecting consumers and the relevant market.
Any form of excessive pricing is bad, but when it comes to medication, you can argue it’s worse. Medication is there to help people and save lives!
More commonly known by their brand names:
- Corlan
- Dioderm
- Efcortelan
- Locoid
- Mildiso
- Liopcream
- Solu-Cortef
Hydrocortisones are used to increase levels of corticosteroid in the human body where the patient’s adrenal glands can’t produce enough natural steroid hormones. Without a healthy level of this substance, the body can be more susceptible to inflammation and swelling.
The point is, hydrocortisone is a very common medicine that should be readily available in quantity and price. The CMA alleges that Intas Pharmaceuticals and Accord Healthcare Limited are charging excessive and unfair prices for hydrocortisone tablets. If true, it really is saddening as it means the two companies appear to be inflating profits at the expense of consumers.
For the medical drug, the consumers are hospitals, other healthcare providers and patients themselves.
The CMA’s press release from 16th December 2016 revealed that 10mg hydrocortisone tablets have seen an incredible price hike in the past eight years. In April 2008, a 10mg pack of hydrocortisone tablets cost the NHS just 70 pence, yet in March of 2016, this rose to a staggering £88 for the same size pack.
That’s a 12,000% increase! The 20mg packs were also increased from £1.07 to £102.74 over the same time period, which is crazy!
For such a commonly used medicine, around 943,000 packs were reportedly dispensed or prescribed in the U.K. in 2015. The NHS uses taxpayers’ money to help fund these packs of hydrocortisone tablets, and reportedly spent £533,000 a year back in 2008 and prior. Now, that figure is but a small fraction of the reported £70 million the NHS spent in 2015 just for these hydrocortisone tablets.
Senior Responsible Officer at the CMA, Andrew Groves, condemned the alleged greedy behaviour:
“…this is a life-saving drug relied on by thousands of patients, which the NHS has no choice but to continue purchasing. We allege that the company has taken advantage of this situation and the removal of the drug from price regulation, leaving the NHS – and ultimately the taxpayer – footing the bill for the substantial price rises.”
The drug was previously branded and sold by a different company back in 2015. Actavis UK debranded the drug and were therefore no longer subject to price regulations.
Debranding the drug allowed other companies to make the same generic drug without being subject to stringent patent laws. However, it also means that it’s no longer subject to strict price regulations, so competitors are allowed to compete on pricing. Unfortunately, this does not always work in practice, as may be the issue in this case. If only one dominant manufacturer or one supplier provides access to this drug, they could set incredibly high prices without the worry of having to compete with anyone in the market.