DRUGMAKER GETS DINGED
Pfizer fined after it increased cost of epilepsy drug by 2,600 per cent,
LONDON— British regulators fined U.S. drugmaker Pfizer and distributor Flynn Pharma a record £89.4 million ($149.6 million) Wednesday for increasing the cost of an epilepsy drug by as much as 2,600 per cent.
Pfizer and Flynn Pharma charged “excessive and unfair prices” for the drug used by 48,000 people in Britain, the Competition and Markets Authority (CMA) said.
Pfizer was fined £84.2 million ($140.9 million) and Flynn Pharma £ 5.2 million ($8.7 million).
“This is the highest fine the CMA has imposed and it sends out a clear message to the sector that we are determined to crack down on such behaviour and to protect customers, including the NHS (National Health Service), and taxpayers from being exploited,” Philip Marsden, chairman of the case decision group for the investigation, said in a statement.
The authority said the companies removed the official brand of Epanutin, Pfizer’s name for phenytoin sodium capsules, so they could increase the price.
As a result, the NHS saw the bill for drug increase to 50 million pounds in 2013, from two million pounds in 2012.
“The companies deliberately exploited the opportunity offered by de-branding to hike up the price for a drug which is relied upon by many thousands of patients,” Marsden said.
Pfizer rejected the ruling, saying that Epanutin was a loss-making product and the deal with Flynn Pharma helped secure supplies of the drug for patients. It plans to appeal, as does Flynn Pharma.
“In this transaction, and in all of our business operations, we approached this divestment with integrity, and believe it fully complies with established competition law,” Pfizer said.
Pfizer said the increased price of the drug was still 25 per cent to 40 per cent lower than the cost of an equivalent medicine by another supplier to the NHS.
“The ruling highlights real policy and legal issues concerning the respective roles of both the Department of Health and the CMA, in regulating the price of pharmaceutical products in the U.K.,” the company said. “Pfizer will seek clarity on these issues as part of the appeal process.”
Regulators around the world are getting tough on drugmakers amid soaring prices that companies say are justified by years of research and product development.
In one recent case, drugmaker Mylan said it would pay $465 million (U.S.) to settle allegations it overbilled Medicaid, the U.S. program that provides health insurance for poor people, for its EpiPen.
In another, Turing Pharmaceuticals’ former CEO Martin Shkreli increased the price of Daraprim by 5,000 per cent.
The drug is the only approved treatment for toxoplasmosis, a lifethreatening parasitic infection that mainly strikes pregnant women, cancer patients and AIDS patients.