The Court of Appeal has confirmed that firms broke the law by charging excessive and unfair prices for hydrocortisone tablets over a decade.
Prices for hydrocortisone tablets rose from less than £1 to over £70 per pack, meaning NHS annual spending rose from around £500,000 to over £80 million.
The CMA found that Auden Mckenzie and Actavis UK charged excessive and unfair prices for hydrocortisone tablets between 2008 and 2018.
Following appeals, the Competition Appeal Tribunal and the Court of Appeal have upheld the CMA's findings.
The Court of Appeal (CoA) has today ruled that the Competition and Markets Authority (CMA) and the Competition Appeal Tribunal (CAT) were right to conclude that Auden Mckenzie and Actavis UK charged excessive and unfair prices for hydrocortisone tablets over a decade.
Tens of thousands of people in the UK depend on hydrocortisone tablets to treat life-threatening conditions such as Addison's disease. In 2007, the drug cost less than £1 per pack. In 2008, Auden Mckenzie bought the licences for hydrocortisone tablets and began increasing prices.
Over the next eight years, Auden Mckenzie and Actavis UK (which took over Auden's business in 2015) increased prices to over £70 per pack. NHS annual spending on the drug rose from around £500,000 in 2007 to over £80 million in 2016. The price increases did not reflect any increase in costs or investment in the drug, which was introduced in 1955.
When other firms began to develop their own hydrocortisone tablets Auden/Actavis bought them off. This allowed it to delay competition that could have brought prices down. Although other firms did eventually enter the market, Actavis UK retained market power and was able to continue charging excessive and unfair prices.
In July 2021, the CMA found that Auden Mckenzie and Actavis UK had abused a dominant position by charging excessive and unfair prices for hydrocortisone tablets between 2008 and 2018. The CMA also found that Auden/Actavis had entered into anti-competitive agreements with its competitors Waymade and AMCo. The CMA imposed penalties totalling £266 million.
In 2023, the CAT rejected the appeals of Auden Mckenzie and Actavis UK against the excessive and unfair pricing infringements. The CAT also upheld the CMA's penalties for the abuses, subject to a £26 million reduction to the penalty for a former parent company to reflect a period when it did not control the business.
The firms appealed to the CoA. The CoA has today dismissed the firms' appeals against the CAT's judgment, finding that none of their grounds of appeal 'get near' to displacing the CMA's and the CAT's conclusions on the infringements.
Juliette Enser, Executive Director for Competition Enforcement, said:
After many years of fighting this case in the courts, this ruling shows once again we were right to take action against firms exploiting the NHS by charging excessive and unfair prices for a lifesaving medicine relied on by thousands of patients.
This ruling should send a clear message that we will not tolerate businesses ripping off the NHS. We will continue this fight and come down on any business breaking the law.
The CoA decided that the firms' appeals on penalties should be remitted to the CAT for reconsideration - not because it accepted the firms' arguments, but because it found that the CAT had not properly addressed them. The firms' appeals against the penalties will be re-heard by the CAT.
Today's judgment follows the CoA ruling in favour of the CMA's appeal of the CAT's decision to overturn its finding of a market sharing agreement on procedural grounds. This means all of the CMA's findings of infringement against the firms have now been upheld on appeal.
