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 Sep 2022 to Oct 2022 Click Here for more Pfizer Charts.
Pfizer (NYSE:PFE)
Historical Stock Chart
From Oct 2021 to Oct 2022 Click Here for more Pfizer Charts.