The Competition and Markets Authority (CMA) conducted a thorough inquiry that led to the imposition of sanctions.
The CMA discovered that Pfizer and Flynn had overcharged the NHS for phenytoin sodium capsules for more than 4 years.
The medicine, formerly known as Epanutin, was debranded by the companies, removing it from price control and allowing them to set pricing as they saw fit.
The NHS was forced to pay the inflated final price for this crucial anti-epilepsy drug since Pfizer and Flynn were the two main suppliers of the medication in the UK at the time.
Pfizer raised prices between 780 and 1,600 percent throughout the course of the subsequent four years.
The business gave the medication to Flynn, who then sold the capsules to wholesalers and pharmacies at a price that was 2,300 to 2,600 percent higher than what Pfizer had been charging.
The cost of phenytoin capsules to the NHS increased from £2 million in 2012 to almost £50 million the following year as a result of this illicit behaviour.
Following its initial investigation, the CMA previously published an infringement decision in December 2016 concluding that the businesses’ conduct violated competition law.
Flynn and Pfizer appealed this judgement to the Competition Appeal Tribunal (CAT).
The CAT supported the CMA’s conclusions regarding market definition and dominance, but it disregarded its finding that the prices charged by the companies constituted an illegal “abuse” of power.
This matter was remitted to the CMA by the CAT for additional review.
Flynn and the CMA subsequently filed an appeal with the Court of Appeal.
In March 2020, the Court completely rejected Flynn’s appeal while upholding portions of the CMA’s appeal about the proper use of the law’s definition of unfair pricing.
Following this, the CMA made the decision to revisit the issues the CAT had referred, and it began its present inquiry in June 2020.
The CMA concluded that Pfizer and Flynn both charged exorbitant prices for phenytoin capsules and that the companies’ actions amounted to an abuse of their dominant positions in their respective marketplaces after collecting and analysing more evidence.
CMA Chief Executive Andrea Coscelli stated:
Thousands of people in the UK depend on phenytoin on a regular basis to stop potentially fatal epileptic seizures. Patients and taxpayers suffered as a result of these companies’ illicit use of their dominating positions to charge the NHS exorbitant costs and increase their own profits.
Such conduct will not be accepted, and the firms now have to deal with the repercussions of their unlawful behaviour.