UK regulator Competition and Markets Authority (CMA) has provisionally found that Canadian drug company Concordia overcharged the National Health Service (NHS) for liothyronine tablets, a major treatment for thyroid.
Last year, the NHS spent more than £34m on the Concordia therapy which marks a significant increase in its price from approximately £600,000 in 2006, revealed the CMA investigation.
The amount paid per pack increased from approximately £4.46 before it was de-branded in 2007 to £258.19 by July this year.
This resulted in a rise of nearly 6,000%, while production costs for the drug remained largely stable.
Liothyronine tablets are mainly used to treat hypothyroidism, a condition caused by a deficiency of thyroid hormone in the body of a person.
Though the drug is not the primary treatment for the condition, it is widely used by many patients who do not have any suitable alternative.
Until earlier this year, Concordia was the only supplier of liothyronine tablets and the company is believed to have abused its dominant position to overcharge the NHS by millions.
CMA chief executive Andrea Coscelli said: “Pharmaceutical companies which abuse their position and overcharge for drugs are forcing the NHS – and the UK taxpayer – to pay over the odds for important medical treatments.
“We allege that Concordia used its market dominance in the supply of liothyronine tablets to do exactly that.
“At this stage in the investigation, our findings are provisional and there has been no definitive decision that there has been a breach of competition law.”
The UK authority is addressing its Statement of Objections to Concordia, in addition to private equity firms Cinven and HgCapital who were the previous owners of entities now forming part of the pharmaceutical company.
In December last year, CMA imposed a £84.2m fine against Pfizer and a £5.2m fine on the distributor Flynn Pharma for charging excessive and unfair prices for phenytoin sodium capsules, an anti-epilepsy therapy, in the UK.