Pfizer Fined $107 Million for Overcharging U.K. for Epilepsy Drug
LONDON—U.S. politicians are publicly bashing drug companies over high prices.
In Britain, regulators took the unusual step Wednesday of doling out a big fine against one of the world’s largest.
The U.K.’s top antitrust regulator slapped Pfizer Inc. with a record $107 million fine, alleging it overcharged the national health-care system for an epilepsy treatment.
The Competition and Markets Authority said Pfizer and drug-distribution company Flynn Pharma Ltd. broke competition law by charging unfair prices in the U.K. for the drug, phenytoin sodium, used by about 48,000 patients in the country. The CMA said the £84.2 million Pfizer fine was the highest it had ever imposed, though its predecessor, the Office of Fair Trading, had doled out higher fines in the past that were subsequently lowered on appeal. The regulator also fined Flynn Pharma £5.2 million and has ordered both companies to reduce their prices.
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The CMA said Pfizer and Flynn Pharma took advantage of a peculiarity of the U.K. system. The price of branded drugs is determined by negotiations between the government and pharmaceutical companies.
Unbranded, or generic, drugs may be freely priced, but competition between suppliers typically drives the cost down. The regulator said Pfizer and Flynn Pharma “deliberately debranded” the drug in 2012 to raise the price and were able to do so because there were no competing suppliers. The CMA said the price of a 100-milligram pack of phenytoin sodium shot up—to £67.50 from £2.83—after Pfizer sold the rights to sell the drug to Flynn Pharma in September 2012. It said the price decreased to £54 in May 2014.
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http://www.wsj.com/articles/pfizer-fined-107-million-for-epilepsy-drug-price-hike-1481104073