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Hydrocortisone shortages due to alleged supplier cartel, CMA concludes

Prices doubled as a result of anticompetitive behaviour

February 28th 2019

Tagged: DM Zone news

By Ailsa Colquhoun

The Competition and Markets Authority (CMA) has provisionally identified anti-competitive behaviour that could have led to hydrocortisone shortages between July 2011 and April 2015.

An investigation into  suppliers Auden Mckenzie and Waymade has prompted the CMA to assert that Auden Mckenzie abused its dominant position by making monthly payments to Waymade not to enter the market.

As a result of this alleged anti-competitive behaviour, the CMA believes the NHS was denied a choice of suppliers and the potential savings resulting from increased competition.

From 2011 to 2015, while Auden Mckenzie remained the sole supplier of 20 mg hydrocortisone tablets, charges to the NHS rose from around £46 to £90 for a pack of 30 tablets, increasing the annual costs incurred by the NHS for the medicine from £1.7 million to £3.7m.

The CMA provisionally finds that in May 2011, Waymade was ready to enter the market for 20 mg hydrocortisone tablets, but then failed to do so until July 2015. Instead, it froze its own stock and agreed a deal with Auden Mckenzie under which it received monthly payments aimed at delaying its entry as a competitor in the market.

Waymade also obtained a licence to sell 10 mg hydrocortisone tablets in September 2012. In exchange for Waymade not entering the market and competing with its own tablets, the CMA alleges that Auden Mckenzie significantly lowered the price it charged Waymade from the market rate of around £32 per pack to £1.

This is a provisional finding. The companies now have the chance to make representations to the CMA before a final decision is reached. This will be made by a case decision group, which is separate from the case investigation team and was not involved in the decision to issue the statement of objections.

A final decision against the companies could result in a financial penalty of up to 10 per cent of annual worldwide group turnover.

For more information see the hydrocortisone tablets: alleged anti-competitive agreements and conduct case page.