The Competition and Markets Authority (CMA) has cracked down on excessive and unfair pricing allegations over Phenytoin Sodium capsules. Pharmaceutical giants Pfizer and Flynn Pharma are accused of abusing dominant positions in the sector to inflate profits; breaking U.K. and EU competition laws in the process.
The CMA’s investigations were reportedly hampered as Pfizer failed to provide information as requested by the authorities.
Phenytoin Sodium is an anticonvulsant and is primarily used to combat and prevent seizures.
The drug can be used for the conditions such as:
- Tonic-clonic seizures;
- Partial Seizures;
- Absence (Petit Mal) Seizures – only in conjunction with other anticonvulsants for combination seizures;
- Seizures associated with neurosurgery;
- Status epilepticus;
- Cardiac Arrhythmias;
- Cardiac Glycoside Intoxication;
- Neuropathic pain.
Why this is a big problem…
For the many people who rely on the drug, any restrictions to access – including pricing – could have an adverse impact on health. When hospitals are reluctant to pay for the drug, the lack of access and availability to patients could mean they’re prescribed less effective alternatives.
Around 50,000 epileptic patients are estimated to rely on this drug; as such, it’s important that patients are not subjected to profit-driven abuse by the companies in charge of making and distributing the drug.
According to the CMA, Pfizer “manufactures phenytoin sodium capsules and supplies them to Flynn Pharma, which then distributed them to UK wholesales and pharmacies”. When a company is the dominant player in its sector, there is a risk of a monopoly. With no one to compete with, the company can easily inflate its prices to whatever they want.
In a capitalist world, the goal is often profit. In cases like this, the desire for greater profits can get out of control, causing the consumer to suffer.
Responsibility of companies with dominant positions
Senior Director of Enforcement at the CMA, Ann Pope, explained:
“…while businesses are generally free to set prices as they see fit, those that hold a dominant position have a special responsibility to ensure that their conduct does not impair genuine competition and that their prices are not excessive and unfair.”
The CMA’s investigation compared the differences in price that the two companies engaged in over the past five years. At the time of the investigation, Pfizer was selling the tablets to Flynn Pharma between 8 to 17 times higher than pre-September 2012. Flynn Pharma would then sell the drugs onto their customers between 25 and 27 times more than pre-September 2012 figures.
The cost to the NHS…
Our National Health Service used to spend £2.3 million on phenytoin sodium tablets. In just two years, this increased to an alarming £40 million; and it’s not because more people are epileptic.
Per 100mg packet, the NHS went from paying £2.83 to £67.50!
The CMA also found that Pfizer was charging the NHS more for the same drug when compared to other European countries.
They were literally ripping off our public health service, it seems!
Significant fines
For breaching U.K. and EU competition laws, Pfizer and Flynn Pharma have been hit with a combined £90 million penalty fine. The giant manufacturer Pfizer is responsible for over 93% of the fine at £84.2 million. However, with a net worth of £51 billion, the fine may not even bother them.
The CMA also demanded the companies reduce their prices.
Hopefully, Pfizer, Flynn Pharma and other major companies in dominant positions take this sanction as a lesson. Whilst the fines may not be enough to really hurt the pockets of these giant corporations, board members may recognise the importance of organisational integrity and their responsibilities to the consumer.