Three firms have been fined a total of over £100 million for their excessive and unfair prices of liothyronine tablets between 2009 -2017.
During this period, pharmaceutical company Advanz increased the price of the drug from £20 to £248 – an increase of 1,110 per cent.
According to the Competition and Markets Authority, in 2007, Advanz developed what it termed a ‘price optimisation’ strategy. This involved identifying genericised drugs with limited or no competition and high barriers to entry. By ‘de-branding’ these drugs, it could remove them from the price regulation scheme for branded drugs, enabling it to set whatever prices it chose.
The price increases were not driven by any meaningful innovation or investment, volumes remained broadly stable, and the cost of producing the tablets did not increase significantly, says the CMA. However, NHS spending on the tablets in 2006, the year before the implementation of the strategy, was £600,000, but by 2009 had increased to more than £2.3 million and jumped to more than £30 million by 2016.
Among those fined are two private equity firms which were previously owners of the businesses now forming part of Advanz. The companies were fined, as follows: Advanz (£40.9 million), HgCapital (£8.6 million) and Cinven (£51.9 million)
For more information, visit the Liothyronine tablets case page.