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• Prices of life-saving hydrocortisone tablets rose by over 10,000%.
• Pharma firms bought off potential rivals to avoid them competing with their own versions of the drug and preserve their ability to increase prices.

The fines are the result of a Competition and Markets Authority (CMA) investigation into the conduct of several pharmaceutical firms which found that Auden Mckenzie and Actavis UK (now known as Accord-UK) charged the NHS excessively high prices for hydrocortisone tablets for almost a decade.

To protect its position as sole provider of the tablets, and enable it to continue to increase prices, Auden Mckenzie also paid off would-be competitors AMCo (now known as Advanz Pharma) and Waymade to stay out of the market. Actavis UK continued paying off AMCo after taking over sales of hydrocortisone tablets in 2015.

Tens of thousands of people in the UK depend on hydrocortisone tablets to treat adrenal insufficiency, which includes life-threatening conditions such as Addison鈥檚 disease.

Andrea Coscelli, Chief Executive at the CMA, said:

鈥淭hese are without doubt some of the most serious abuses we have uncovered in recent years. The actions of these firms cost the NHS 鈥� and therefore taxpayers 鈥� hundreds of millions of pounds.

鈥淎uden Mckenzie鈥檚 decision to raise prices for de-branded drugs meant that the NHS had no choice but to pay huge sums of taxpayers鈥� money for life-saving medicines. In practice, the NHS was at one point being charged over 拢80 for a single pack of tablets that had previously cost less than 拢1.

鈥淭hese were egregious breaches of the law that artificially inflated the costs faced by the NHS, reducing the money available for patient care. Our fine serves as a warning to any other drug firm planning to exploit the NHS.鈥�

Excessive and unfair pricing

Accord-UK 鈥� and, for their ownership periods, its parent companies Intas and Accord and its former parent firm Allergan 鈥� have been fined 拢155 million for charging the NHS excessive and unfair prices for hydrocortisone tablets for almost 10 years, from 2008 to 2018. From 2008 to 2015, hydrocortisone tablets were sold by Auden Mckenzie. Actavis UK (now known as Accord-UK) took over the business in 2015 and is held liable for Auden Mckenzie鈥檚 conduct before that date.

The CMA found that Auden Mckenzie and Actavis UK increased the price of 10mg and 20mg hydrocortisone tablets by over 10,000% compared to the original branded version of the drug, which was sold by the drug鈥檚 previous owner prior to April 2008. This meant the amount the NHS had to pay for a single pack of 10mg tablets rose from 70p in April 2008 to 拢88.00 by March 2016. For the 20mg strength, prices rose from 拢1.07 to 拢102.74 per pack over the same period. After competitors entered the market, prices fell gradually, but Actavis UK continued to charge high prices and higher prices than its rivals.

The impact on the NHS 鈥� and ultimately the UK taxpayer 鈥� was significant. Before April 2008, the NHS was spending approximately 拢500,000 a year on hydrocortisone tablets. This had risen to over 拢80 million by 2016.

Market sharing

The CMA has also fined Accord-UK and Allergan 鈥� as former parent 鈥� a further 拢66 million for paying two would-be competitors to stay out of the market.

Auden Mckenzie paid pharmaceutical companies Waymade and AMCo (now known as Advanz Pharma) not to enter the market with their own generic versions of hydrocortisone tablets. Waymade was set to enter with 10mg and 20mg versions and AMCo with a 10mg version. In exchange for staying out of the market, Auden Mckenzie paid the companies on a monthly basis 鈥� paying AMCo 拢21 million and Waymade 拢1.8 million in total over the duration of the relevant agreement. After taking over sales of hydrocortisone tablets in 2015, Actavis UK continued to pay off AMCo.

For their part in the collusion, the CMA has fined Advanz 鈥� and its former parent Cinven 鈥� a total of 拢43 million and Waymade 拢2.5 million.

These illegal agreements were in place for approximately 4 years each 鈥� Waymade was only party to the 10mg agreement for a short period before its 10mg business was sold to Cinven and AMCo took its place. For the majority of this time Auden Mckenzie remained the only supplier of the drug and almost doubled its price, with the amount the NHS had to pay increasing from 拢49 to 拢88 per packet.

By colluding with AMCo and Waymade to keep them out of the market, Auden Mckenzie, and later Actavis UK, denied the NHS the potential savings that could have resulted if the companies had been competing against each other.

As well as imposing substantial fines, the CMA鈥檚 decision means the NHS will be able to seek damages for the firms鈥� behaviour, should it choose to do so.

The investigation into these firms is part of the CMA鈥檚 ongoing work in the pharmaceutical sector, and it currently has a number of live investigations. Recent action includes securing an 拢8 million repayment to the NHS after companies took part in illegal arrangements relating to the supply of fludrocortisone, and fining 4 firms 拢3 million for breaking competition law regarding the antidepressant nortriptyline.

Notes to editors:

1. During the time when the infringements took place and the subsequent investigation, Accord-UK and Advanz Pharma underwent name changes:
   • Accord-UK: previously named Actavis UK, is the economic successor of Auden Mckenzie, a separate company whose business was transferred to Accord-UK in 2015. Accord-UK鈥檚 current parent groups are Intas and Accord, and its former parent group was Allergan. Actavis UK was acquired by Intas and Accord in January 2017 and changed its name to Accord-UK in March 2018;
   • Advanz Pharma: previously named Concordia and before that AMCo. Its former parent group was the private equity firm Cinven.

2. Auden Mckenzie and Actavis UK 鈥� now Accord-UK 鈥� exploited the fact that de-branded drugs are not subject to NHS price regulation, enabling them to increase their prices without constraint. After Auden Mckenzie bought the licences for hydrocortisone and launched its own generic versions in 2008, it paid off potential competitors and then increased its prices until 2016.

3. The total fines imposed are as follows: - The total fines for the conduct of Auden Mckenzie and Actavis UK are 拢221.1 million, of which Accord-UK is solely liable for 拢65.6 million, Allergan is solely liable for 拢109.1 million, Accord-UK and Allergan are jointly and severally liable for 拢2 million and Accord-UK, Accord Healthcare and Intas are jointly and severally liable for 拢44.4 million. - The total fine for AMCo鈥檚 conduct is 拢42.8 million, of which the Cinven entities are solely liable for 拢20.9 million, Amdipharm Limited, Amdipharm UK Limited and Advanz Pharma Services (UK) Limited and the Cinven entities are jointly and severally liable for 拢14.2 million, and Amdipharm Limited, Amdipharm UK Limited and Advanz Pharma Services (UK) Limited and Advanz Pharma Corp Limited are jointly and severally liable for 拢7.7 million. - Waymade plc has been fined a total of 拢2.5 million.

4. The infringement decision is addressed to the following legal entities:
   1. Accord-UK Limited (formerly known as Actavis UK Limited);
   2. Auden Mckenzie (Pharma Division) Limited;
   3. Allergan plc (formerly known as Actavis plc);
   4. Accord Healthcare Limited;
   5. Intas Pharmaceuticals Limited;
   6. Waymade plc (formerly known as Waymade Healthcare plc);
   7. Amdipharm UK Limited;
   8. Amdipharm Limited;
   9. Advanz Pharma Services (UK) Limited (formerly known as Amdipharm Mercury Company Limited);
   10. Cinven Capital Management (V) General Partner Limited;
   11. Cinven (Luxco 1) S.A.;
   12. Cinven Partners LLP; and
   13. Advanz Pharma Corp. Limited (formerly known as Advanz Pharma Corp. and Concordia International Corporation).
5. In its decision, the CMA found that:
   1. Auden Mckenzie/Actavis UK infringed the Chapter II prohibition in the Competition Act 1998 by charging excessive and unfair prices for 10mg and 20mg hydrocortisone tablets during the periods 1 October 2008 to 31 July 2018 (10mg) and 1 October 2008 to 8 January 2017 (20mg);
   2. Auden Mckenzie and Waymade infringed the Chapter I prohibition by entering into an agreement that had as its object the prevention, restriction or distortion of competition with respect to 20mg hydrocortisone tablets from 11 July 2011 to 30 April 2015; and
   3. Auden Mckenzie/Actavis UK, Waymade and AMCo infringed the Chapter I prohibition by entering into an agreement that had as its object the prevention, restriction or distortion of competition with respect to 10mg hydrocortisone tablets. Waymade was Auden Mckenzie鈥檚 counterparty to the agreement from 23 October 2012 to 30 October 2012, and AMCo was Auden Mckenzie/Actavis UK鈥檚 counterparty from 31 October 2012 to 24 June 2016.

6. Liability for Auden Mckenzie鈥檚 conduct is attributed to its economic successor Accord-UK (previously known as Actavis UK); to Allergan plc as the former parent company of Auden Mckenzie and Actavis UK; and to Accord Healthcare and Intas Pharmaceuticals as the current parent companies of Accord-UK. Allergan, Accord Healthcare and Intas Pharmaceuticals are only liable for their respective ownership periods.

7. Liability for AMCo鈥檚 conduct is attributed to Amdipharm Limited, Amdipharm UK Limited and Advanz Pharma Services (UK) Limited as direct infringers; to Cinven Capital Management (V) General Partner Limited, Cinven (Luxco 1) S.A. and Cinven Partners LLP as former parents of the direct infringers; and to Advanz Pharma Corp Limited as the current parent company of the direct infringers. The Cinven entities and Advanz Pharma Corp Limited are only liable for their respective ownership periods.

8. The Chapter I prohibition in the Competition Act 1998 covers anti-competitive agreements and concerted practices between businesses which have as their object or effect the prevention, restriction or distortion of competition within the UK. The Chapter II prohibition in the Competition Act 1998 prohibits the abuse of a dominant position by one or more companies which may affect trade within the UK or a part of it.

9. The CMA may impose a financial penalty on any business found to have infringed either of these provisions of up to 10% of its annual worldwide group turnover. In calculating financial penalties, the CMA takes into account a number of factors including seriousness of the infringement(s), turnover in the relevant market and any mitigating and/or aggravating factors.

10. For media queries, please contact the press office via [email protected] or on 020 3738 6460.