The UK's competition watchdog today accused two major drugmakers of charging "excessive and unfair" prices for an anti-epilepsy drug in Britain.
Pfizer and Flynn Pharma were accused by the Competition and Markets Authority (CMA) of "abusing a dominant position" by ramping up the cost of phenytoin sodium capsules in a potential breach of UK and EU competition law.
The drug is used by more than 50,000 patients in the UK to help prevent and control seizures.
US firm Pfizer manufactures the drug and supplies it to Hertfordshire-based Flynn Pharma, which distributes it.
The CMA said the prices had been hiked since Pfizer sold the rights to market the medicine to Flynn in September 2012.
It said since then, the US company had sold the drug to Flynn at prices between eight and 17 times higher than it was previously sold to UK wholesalers and pharmacies. Flynn has then sold phenytoin sodium to customers for 25 to 27 times more than before.
As a result, the NHS paid more than £50 million for the capsules in 2013 and more than £40 million in 2014, compared to around £2.3 million a year prior to September 2012.
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 prices that the CMA is concerned about in this case are very high compared to those prices previously charged and have led to a big increase in the total NHS drug bill for what is a very important drug for tens of thousands of patients.
Both drug firms said said they were co-operating with the CMA investigation and that the objections published on Thursday were only provisional findings.
Ensuring a sustainable supply of our products to UK patients is of paramount importance to Pfizer and was at the heart of our decision to divest the product.
A Flynn Pharma spokesman said they would "vigorously" defend themselves.