Pfizer Handed $75.6 Million Fine for Overcharging UK Health Service for Epilepsy Drug -- Update
July 22 2022 - 8:36AM
Dow Jones News
By Joe Hoppe
Pharma giant Pfizer Inc. has been fined 63.0 million pounds
($75.6 million) by the U.K. markets regulator for overcharging the
country's National Health Service for a life-saving epilepsy
drug.
Flynn Pharma Ltd. was also fined GBP6.7 million for charging
what the Competition and Markets Authority described as unfairly
high prices for phenytoin sodium capsules for more than four years,
with the ultimate cost borne by the NHS, the regulator said in a
statement dated Thursday.
The CMA had initially issued an infringement decision in
December 2016 which was challenged by the companies in a long
appeal process. In March 2020, a court dismissed Flynn's appeal and
the regulator opened a reinvestigation.
Spokespersons for both Pfizer and Flynn said they disagreed with
the latest decision and intended to appeal.
The CMA said the companies debranded the drug--formerly known as
Epanutin--so that it was no longer subject to price regulation and
allowing them to set prices at their discretion. As Pfizer and
Flynn were the dominant U.K. suppliers of the drug at the time, the
NHS had no choice but to pay the inflated final price, the
regulator said.
Over four years Pfizer charged prices between 780% and 1,600%
higher than previously, the CMA said. The company supplied the drug
to Flynn, which sold the capsules on to pharmacies and wholesalers
for 2,300%-2,600% higher than previously, the regulator said.
NHS annual costs for phenytoin capsules rose from GBP2 million
in 2012 to around GBP50 million the following year, according to
the regulator.
A Pfizer spokeswoman said in a statement that ensuring a
sustainable supply of products to U.K. patients was the reason for
its decision to divest the capsules to Flynn in 2012.
"The Competition Appeal Tribunal and the Court of Appeal both
ultimately found in Pfizer's favor in respect of the CMA's original
decision, which was set aside together with the associated fine. We
maintain that we approached this divestment, as with all our
business operations, with integrity and believe it fully complies
with established competition law," the spokeswoman said.
In a statement, a Flynn spokesman said it was surprised and
disappointed at the CMA's issuance.
"For the avoidance of doubt, Flynn announces its intention to
again appeal the CMA decision. We believe that once the matter is
fully tested in a full merits review, Flynn will again be
vindicated," the spokesman said.
Write to Joe Hoppe at joseph.hoppe@wsj.com
(END) Dow Jones Newswires
July 22, 2022 08:21 ET (12:21 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
Pfizer (NYSE:PFE)
Historical Stock Chart
From Aug 2024 to Sep 2024
Pfizer (NYSE:PFE)
Historical Stock Chart
From Sep 2023 to Sep 2024