UK’s CMA alleges price-gouging by four firms that restricted supply of nausea drug

By PharmaCompass

2019-05-30

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Last week, the UK’s Competition and Markets Authority (CMA) alleged that Focus Pharmaceuticals, Medreich, Alliance Pharmaceuticals and Lexon entered into an anti-competitive agreement, restricting the supply of nausea and dizziness medicine — prochlorperazine. In this manner, the companies breached laws in both the UK and EU.

CMA has alleged that Alliance Pharmaceuticals supplied prochlorperazine exclusively to Focus Pharmaceuticals. And Focus paid Lexon a share of the profits and Lexon then shared these payments with Medreich.

However, prior to these agreements, Lexon and Medreich had been jointly readying the launch of another prochlorperazine product. And even though Medreich obtained a license to supply prochlorperazine in January 2014, it did not supply the product until November 2017.

The allegations follow CMA’s finding that the prices paid for prochlorperazine by the National Health Service (NHS) between December 2013 and December 2017 rose by about 700 percent — from US$ 8.23 (£6.49) per pack of 50 tablets to US$ 65.50 (£51.68)

Ann Pope, CMA senior director of antitrust, said: “The NHS should not be denied the opportunity of benefitting from an increased choice of suppliers, or lower prices, for important medicine.”

Alliance said it has had no involvement in the pricing or distribution of prochlorperazine since 2013, when it was out-licensed by the company to Focus Pharmaceuticals Limited on an exclusive basis.

Similarly, Advanz Pharma said the statement of objections issued by the CMA “includes matters that pre-date the company’s ownership of the medicine, which was acquired from Cinven and certain other sellers as a result of a transaction to purchase Amdipharm Mercury Limited, which closed on October 21, 2015.”

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