Four pharma companies ‘worked together to fleece NHS of millions by inflating a drug price 700% in just four years’
- Pharmaceutical companies Alliance, Focus, Lexon and Medreich are involved
- The Competition and Markets Authority accused them of breaking the law
- The Government can fine companies up to 10 per cent of their annual turnover
- One company denied it had profited while three did not comment right away
Four pharmaceutical companies have been accused of breaking the law to fleece the NHS out of millions of pounds.
Alliance Pharma, Focus, Lexon and Medreich allegedly agreed for only one of them to sell a particular anti-nausea drug so it could hike up the price.
The Government’s Competition and Markets Authority (CMA) accused the firms of working together to inflate the price of the drug by 700 per cent in four years.
The medicine, called prochlorperazine, is prescribed by the NHS to treat nausea and dizziness – last year more than 6.2million of the dissolvable tablets concerned were prescribed.
If found guilty, the firms could be fined as much as £35million by the British Government.
Four companies have been accused of inflating the price of prochlorperazine dissolvable tablets, which are used to treat nausea and vertigo in people with ear infections and migraine
New hope for cystic fibrosis patients
NHS bosses have made an ‘improved’ offer to a pharmaceutical company in an attempt to break the deadlock over access to a vital cystic fibrosis drug.
A row between the US firm Vertex and the NHS over the cost of Orkambi has dragged on for three years with no breakthrough.
Cystic fibrosis is a genetic disorder – mostly affecting the lungs – that shortens life expectancy. The game-changing medicine could improve the health of around half of the 10,000 people with the condition in the UK.
But Orkambi has a list price of £104,000 per patient per year and the drug must be taken for life. Yesterday John Stewart, national director of specialised commissioning, told the Commons health and social care committee that NHS England had held five meetings with Vertex since the start of March, but had ‘not received any specific or formal proposals from Vertex during this period’.
However, NHS England had submitted a ‘revised and improved’ offer to Vertex.
Mr Stewart said details of the offer were commercially sensitive, but it included a proposed two-year ‘managed access’ arrangement for Orkambi and another cystic fibrosis drug, Symkevi, for all eligible patients.
‘The NHS should not be denied the opportunity of benefitting from an increased choice of suppliers, or lower prices, for important medicine,’ said Ann Pope, a senior director at the CMA.
‘Agreements where a company pays a rival not to enter the market can lead to higher prices and deprive the NHS of huge savings that often result from competition between drug suppliers.’
The CMA alleges that Focus Pharmaceuticals paid Lexon and Medreich not to sell prochlorperazine 3mg dissolvable tablets to the NHS.
This made Focus the only supplier of the medication, which was produced by Alliance Pharma, allowing it to bump up the price as much as it liked.
It increased the price from £6.49 for a pack of 50 in 2013 to £51.68 for the same size pack in 2017, the CMA claims.
During the same period, the amount the NHS spent on the drugs rose from £2.7million to £7.5million, even though it was prescribing fewer of them – suggesting millions of pounds were wasted.
HOW DOES THE NHS BUY MEDICINES?
The NHS spent approximately £8.8billion on prescription medications in 2018.
For a medicine to be funded for the NHS, it first has to be approved by the National Institute for Health and Care Excellence.
New medicines then have to have a budget impact test to make sure it is worth the money a pharmaceutical company is charging for it.
How many people will take the drug, the condition it is used to treat, and what alternative treatments are available are all likely to be considered.
After NICE has decided who should be eligible for a medication and has confirmed how much it will cost, the health service can choose to buy it.
NHS England can negotiate directly with suppliers if a drug is going to cost more than £20 million a year during any of the first three years of its use.
In this way, the NHS may be able to secure drugs for below their market rate.
The NHS has also ruled that low value medicines and those which are widely available in shops should not be offered on prescription.
Last year it was revealed laxatives, sun cream, wart treatments, cough mixture and diarrhoea therapies would no longer be funded by the NHS for most patients.
The CMA said all four companies were party to agreements which broke the law.
It said an agreement for Alliance Pharma to supply the product only to Focus, and another for Focus to pay Lexon and Medreich not to sell its own versions, were both unacceptable.
Prochlorperazine is used to treat nausea and vertigo which are caused by an inner ear infection called labyrinthitis, migraine or Meniere’s syndrome.
It may also be used to help treat mental health problems including schizophrenia, anxiety or mania.
The four firms will now have a chance to argue their case before the CMA reaches its final decision.
If found guilty of breaking competition law the companies could be fined 10 per cent of a year’s turnover, which would rise into the millions of pounds for all four.
Combined, the companies’ most recent accounts showed a total turnover of more than £350million. Lexon, which took around £200m last year, could take the biggest hit.
A statement from Alliance Pharma denied it had profited from the scheme and said prochlorperazine was one of the smaller products in its portfolio and it made less than £200,000 from it in 2018.
The firm said: ‘Alliance confirms that 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 as is normal market practice.
‘Alliance has not had control of or influence on, and nor has it benefited from, any price increases.
‘Prior to 2013, prochlorperazine was marketed directly by the Company.
‘Alliance will review the Statement of Objections in detail and work closely with the CMA to resolve its alleged objections. Alliance strongly condemns anti-competitive practices.’
A spokesperson for Lexon declined to comment, and Focus and Medreich did not respond immediately to requests.