Drug firms ‘fixed price of life-saving pills to rip off NHS by £2m’

The British companies broke the law when they artificially drove up the cost of hydrocortisone pills, the competition watchdog said in a provisional ruling.

Hydrocortisone is an essential drug for sufferers of Addison’s disease, which affects 8,400 in the UK who do not produce natural steroid hormones. The condition causes fatigue, dizziness and fainting, and can be fatal without hydrocortisone treatment.

The Competition and Markets Authority yesterday accused Auden Mckenzie of paying its rival Waymade not to sell the drugs, allowing it to remain the sole supplier and to double its price from £46 to £90 for a 30tablet pack of 20mg hydrocortisone pills.

As a result of the hike, from 2011 to 2015 the annual cost for the drugs paid by the NHS jumped from £1.7 million to £3.7 million, the CMA said.

The two firms can appeal but if the CMA confirms its ruling they could be fined up to 10 per cent of their global turnover.

The price of branded drugs is strictly regulated in the UK because firms that own the patent could otherwise charge what they like. But as soon as a drug comes to the end of its patent the price regulation is lifted.

Any firm can then make the drug, so market forces should – in theory – lower the price.

But when Auden Mckenzie allegedly paid Waymade to stay out of the market, it was free to hike the price.

Accusing the firms of breaking competition law, the CMA said the NHS was ‘denied the potential savings resulting from increased competition’.

The watchdog said in May 2011, Waymade was ready to

‘Froze its own stock’

sell 20mg tablets, ‘ but then failed to do so until July 2015’. It added: ‘It froze its own stock and agreed a deal with Auden Mckenzie under which it received monthly payments.’

Waymade, based in Basildon, Essex, said it was ‘ confident’ that timing its entry to the market ‘did not influence the cost of the drugs to the NHS’.

Auden Mckenzie, based in Ruislip, north-west London, has since been bought by a firm called Actavis, which was in turn purchased by global pharmaceutical giant Teva.

A Teva spokesman said it was reviewing the claims and would defend itself ‘vigorously’.