The UK Competition and Markets Authority (CMA) has accused Alliance Pharmaceuticals, Focus, Lexon and Medreich of avoiding competition for anti-nausea drug, prochlorperazine.
Indicated for the treatment of nausea and dizziness, the drug is a neuroleptic sold under the brand name Compro.
Go deeper with GlobalData
According to the CMA, the drugmakers agreed not to compete for the supply of prescription-only 3mg dissolvable or buccal prochlorperazine tablets to the National Health Service (NHS) between June 2013 and July 2018.
Prices paid by the NHS for the drug increased by approximately 700% between December 2013 and December 2017, rising from £6.49 per pack of 50 tablets to £51.68.
The annual costs incurred by the NHS from 2014 to 2018 are said to have surged from around £2.7m to £7.5m, despite a decrease in the number of packs dispensed.
The competition authority found that Focus paid a portion of the profits earned on the supply of the Alliance Pharmaceuticals product to Lexon and Medreich.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataIn addition, Lexon and Medreich agreed not to compete for the medication’s supply in the UK.
CMA further alleged an overarching agreement between all four companies, implemented as a deal between Alliance Pharmaceuticals and Focus, and a separate one between Focus, Lexon and Medreich.
CMA said that even after obtaining a licence to supply the drug in January 2014, Medreich did not do so until 2017.
CMA antitrust senior director Ann Pope said: “Agreements where a company pays a rival not to enter the market can lead to higher prices and deprive the NHS of huge savings that often result from competition between drug suppliers.
“The NHS should not be denied the opportunity of benefitting from an increased choice of suppliers, or lower prices, for important medicine.”
The companies have an opportunity to offer representations before the CMA reaches a final decision.
Earlier this month, 44 US states filed an antitrust lawsuit that 20 pharmaceutical companies that make generic drugs have collaborated to fix prices and reduce market competition.
