© 2019 - International Centre for Investigative Reporting
South Africa pharm to pay UK NHS eight million pounds over illegal market competition
SOUTH African drug firm Aspen has offered to pay the National Health Service £8m, as part of a wider package, to resolve competition concerns over the supply of a fludrocortisone acetate 0.1 mg tablets.
The offering comes off the back of an investigation by the Competition and Markets Authority (CMA) into suspected anti-competitive arrangements regarding the drug.
PharmTimes reports that the arrangement marks the first time the CMA will secure such payment to the NHS in one of its pharmaceutical investigations.
The CMA has been investigating claims that Aspen entered into arrangements with two rival companies in 2016, and confirmed that competition law had been broken by Aspen paying competitors to stay out of the market. The arrangements subsequently left Aspen as the sole supplier of fludrocortisone, with the ability to set prices without facing any competition.
The CMA has announced that as a result of the case, Aspen approached the organisation with a proposed package to resolve the differences, which includes admission of illegality: Aspen admits it was party to an illegal, anti-competitive agreement, by way of settlement, and compensation to address CMA’s concerns: Aspen will commit to pay £8 million to the NHS – without the Government having to launch court proceedings for damages.
This is intended to address the CMA’s concerns that as a result of the impact of Aspen’s behaviour, the NHS paid a higher price for fludrocortisone.
The disgraced company will also pay a maximum fine of £2.1 million, once the CMA has concluded its investigation if it reaches a formal decision that the law has been broken. The CMA is continuing its investigation given other companies are involved.
Andrea Coscelli, the CMA’s chief executive, said that the organisation launched the investigation because they consider it “unacceptable for the NHS – and the taxpayers who fund it – to have to pay millions of pounds more than they should for this life-saving drug.
“This is the first time a CMA investigation will secure payment for the NHS. The £8 million Aspen has agreed to provide will save the NHS the time and expense of seeking damages in court. Importantly, Aspen has also committed to ensuring there are more competitors in this market, giving the NHS the opportunity to secure better value for UK taxpayers’ money in the future.”
He added that the organisation “welcomes Aspen approaching” to find a new way of addressing the CMA’s concerns.
The CMA currently has other unrelated investigations open in relation to six other pharmaceutical drugs.