Major excessive pricing decision just adopted by the UK CMA

A couple of weeks ago, I wrote a post about Commissioner Vestager’s speech regarding exploitative abuses, which triggered questions among practitioners as to whether the Commission would be initiating excessive pricing cases in the future.

I am not aware of any such investigation by the Commission, but the UK Competition and Markets Authority (CMA) has just adopted a decision imposing a record £84.2 million fine on the pharmaceutical manufacturer Pfizer and a £5.2 million fine on the distributor Flynn Pharma after finding that each broke competition law by charging excessive and unfair prices in the UK for phenytoin sodium capsules, an anti-epilepsy drug. The CMA has also ordered the companies to reduce their prices. The decision follows price increases by up to 2,600% after the drug was deliberately de-branded (and thus no longer subject to price regulation) in September 2012. According to the CMA, this significantly impacted the NHS with its expenditures on phenytoin sodium capsules increased from about £2 million a year in 2012 to about £50 million in 2013.

This decision is likely to lead to a massive action in damages against Pfizer and Flynn Pharma as I suspect that the NHS will want to recover the extra sums it had to spend to purchase phenytoin sodium capsules during the infringement period.



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