Four drugs fined £3.4MILLION for ‘cheating the NHS’

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Four pharmaceutical companies are fined £3.4MILLION for ‘cheating the NHS’ by working together to inflate the prices of antidepressants prescribed to thousands of people

  • The Competition and Markets Authority dished out a total of £3.4million in fines 
  • CMA said two companies colluded to fix quantities and prices of nortriptyline
  • Two other companies also hit for illegally sharing commercially sensitive info 
  • Nortriptyline is prescribed by the NHS and relied on by patients with depression

By Leigh Mcmanus For Mailonline

Published: | Updated:

Four drugs firms have been fined a total of £3.4million for conspiring to push up prices of an anti-depressant.

A probe by The Competition and Markets Authority (CMA) also led to £1million payments to be made to the NHS and the firing of a company director.   

King Pharmaceuticals and the pharma arm of Auden Mckenzie colluded to fix quantities and prices for the supply of nortriptyline to a large drugs wholesaler.

King was also found to have been illegally sharing commercially sensitive information to try to keep nortriptyline prices up along with Alissa Healthcare Research and Lexon UK.

Nortriptyline is prescribed by the NHS and relied on by thousands of patients every month to relieve the symptoms of depression.

NHS spending on the drug peaked at £38million in 2015 – when illegal conspiring began.

 The Competition and Markets Authority (CMA) said King Pharmaceuticals and the pharma arm of Auden Mckenzie colluded to fix quantities and prices for the supply of nortriptyline

The CMA investigated two breaches of competition law – market sharing and information exchange.

It found that, rather than competing, King and Auden Mckenzie shared out between them the supply of nortriptyline to a large pharmaceutical wholesaler from September 2014 to May 2015.

King and Auden Mckenzie have admitted breaking the law.   

The CMA said it was holding the new owner of Auden’s nortriptyline business – Accord-UK – responsible, despite it buying the division after the the market-sharing ended. 

The CMA has fined King £75,573 and Accord-UK £1.9million. 

On top of this, Accord-UK with Auden Mckenzie have also agreed to make a £1million payment directly to the NHS.

The CMA is also fining King, Lexon’s UK business and Alissa Healthcare Research for illegally sharing commercially sensitive information.

While the cost of the drug was falling, the three companies exchanged information to try to keep nortriptyline prices up between 2015 and 2017.

King was fined a further £75,573, while Alissa was hit with a £174,912 penalty. Lexon did not admit to breaking the law and is being fined a total of £1,220,383.

Auden Mckenzie, headquartered in Ruislip, London (pictured), allegedly paid another company to not sell its own product so Auden Mckenzie could charge more

Auden Mckenzie, headquartered in Ruislip, London (pictured), allegedly paid another company to not sell its own product so Auden Mckenzie could charge more

The CMA also disqualified Dr Philip Hallwood, a director at King and the sole director of consultancy firm Praze, which conducted King’s corporate and commercial services during the illegal activity.

He is banned from acting as a director for any UK company for seven years, while the regulator is considering similar action against other directors involved in the scandal.

Andrea Coscelli, chief executive at the CMA, said: ‘These firms exchanged sensitive information and shared out supply to try and keep prices up, meaning the NHS – and ultimately the UK taxpayer – could have been paying over the odds for this vital drug.

‘That’s why we’ve worked hard to secure £3.4million in fines and another payout for the NHS.

‘Today’s decisions should act as a clear warning to any pharmaceutical company that considers stifling competition and cheating the NHS.’

HOW DOES THE NHS BUY MEDICINES? 

The NHS spent approximately £17.4 billion on medications in 2017, a figure which has been growing by an average of five per cent a year since 2010.

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. 

Source: The King’s Fund