The Competition and Markets Authority (CMA) welcomes today’s
landmark judgment, which endorses all the main elements of the
CMA’s decision in respect of liothyronine tablets – an essential
medicine to treat thyroid hormone deficiency.
Advanz, the sole supplier of the tablets, increased prices by
over 1,000% from £20 to £248 per pack between 2009 and 2017,
resulting in an £84 million fine.
Michael Grenfell, Executive Director, Enforcement at the CMA,
said:
We are delighted that the Competition Appeal Tribunal has
unanimously upheld the CMA’s infringement findings. Today’s
landmark judgment reinforces the need for companies to think
carefully about how they set prices and paves the way for the NHS
to seek compensation.
The CMA will continue to crack down on companies which abuse
their market power in ways that harm people and the wider
economy.
On 29 July 2021, the CMA found that Advanz’s excessive pricing
constituted an abuse of its dominant position, in breach of
competition law.
As a result of today’s judgment, Advanz Pharma (the current owner
of the Advanz business) together with HgCapital and Cinven (2
former owners of the Advanz business) face a total fine of over
£84 million for the relevant periods in which they broke the law.
Further information on the CMA’s decision can be found in the
final
report published on the CMA website.
Advanz Pharma, Cinven, and HgCapital each appealed the CMA’s
decision to the Competition Appeal Tribunal. They disputed that
the prices charged for liothyronine tablets were excessive and
unfair and sought to overturn the fines imposed by the CMA.
In a unanimous judgment, the Tribunal fully upheld the CMA’s
finding that Advanz had abused its dominant position by charging
excessive and unfair prices for liothyronine tablets between 2009
and 2017.
In particular, the Tribunal found that the price increases were
part of a deliberate strategy to exploit the lack of regulatory
or competitive constraints and resulted in a significant impact
on the NHS. The Tribunal dismissed all of the appellants’ grounds
of appeal on liability.
NHS annual spending on the tablets in 2006, the year before the
implementation of the strategy, was £600,000, but by 2009 had
increased to more than £2.3 million and jumped to more than £30
million by 2016.
More information on the CMA’s investigation into the excessive
and unfair pricing of liothyronine tablets is available on the
case page.
Notes to editors
-
Previous action taken by the CMA in relation to the pharma
sector and the fines imposed:
-
Paroxetine
(2016): £45 million in fines for anti-competitive
agreements and abuse of dominance.
-
Fludrocortisone
(2019): £2.3 million in fines and £8 million redress to the
NHS for market-sharing.
-
Nortriptyline
(2020): £3.4 million in fines and £1 million redress to the
NHS for illegal arrangements including market-sharing and
information exchange.
-
Hydrocortisone
(2021): £260 million in fines for excessive and unfair
pricing and market sharing.
-
Prochlorperazine
(2022): £35 million in fines for an illegal arrangement
that restricted competition in the supply of prescription
tablets.
-
Phenytoin
(2022): £70 million in fines for excessive and unfair
pricing.
- Previous press release: CMA fines pharma firm
over pricing of crucial thyroid drug (29 July 2021).
- While fully upholding the CMA’s infringement findings against
all three appellants, the Tribunal decided to reduce the
penalties imposed by the CMA on 2 of the appellants (Cinven and
HgCapital) by £17.2 million in total, reducing the CMA’s overall
fine of over £101 million to £84.2 million. The final penalties
by party are: Hg: £6.2 million, Cinven: £37.1 million and Advanz
Pharma: £40.9 million.
