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07 December 2016

Drug firms should blush at up to 2,600 per cent price rise to NHS

Epilepsy Society's new chief executive Clare Pelham has stressed the need for a balance in the price the NHS is charged for drugs. The call follows news that Pfizer has been fined a record £84.2 million for its role in over-charging for an epilepsy drug.

The pharma company was fined by the competition watchdog, the Competition and Markets Authority (CMA) for increasing the price of its phenytoin sodium capsules by between 2,300-2,600 per cent over night in 2012.

The Competition and Markets Authority (CMA) also fined distributor Flynn Pharma £5.2 million after it accused the pair of "excessive and unfair" pricing for the vital medicine used by around 48,000 patients in the UK.

Clare Pelham talks to Sky News (starts at 1:35)

Reasonable profit

Clare Pelham said: 'There must be a balance on the price the NHS is charged for drugs. Manufacturers must make a reasonable profit to fund their important research and ensure patients continue to receive important drugs.

'Over one per cent of the population - or 600,000 people - have epilepsy, It is vital that they can have confidence in the supply of their current medication, and confidence that research is underway to develop new and better drugs for the future. Every day members of the public support medical research by Epilepsy Society, with our partners, to improve the lives of those affected by epilepsy. It seems entirely wrong that as tax payers they should be asked to support price increases by up to 2,600 per cent to the NHS.

'The CMA is a serious and thoughtful body and when they describe pricing as "excessive and unfair" then I think drug manufacturers should pause and take a moment to reflect. The prime minister has spoken about responsible capitalism. It doesn't feel as if price increases of up to 2,600 per cent quite pass that blush test.'

Government crackdown

The fines come amid a government crackdown on drug pricing abuse over fears firms are using generic versions of medicines to exploit an NHS loophole.

The CMA said the NHS saw the cost of phenytoin sodium capsules, which are used to prevent and control seizures, rocket by between 2,300 per cent and 2,600per cent overnight in September 2012 after it was deliberately debranded.

US-based Pfizer has rejected the findings and plans to appeal against the decision.

Pfizer makes the drug and sells it to Flynn, which in turn sells it to the NHS.

Epanutin

Pfizer used to make and sell the drug under the brand name Epanutin, but sold the UK distribution rights to Flynn in September 2012.

It was then debranded, meaning that it was no longer subject to price regulation and both firms were free to ramp up the price.

The CMA said the NHS at one stage saw the price of 100mg packs of the drug jump from £2.83 to £67.50.

Price hike

The hikes meant the cost to the NHS rocketed from around £2 million a year in 2012 to about £50 million in 2013.

The CMA said UK prices were many times higher than elsewhere in Europe.

But the NHS had no alternative but to pay, as epilepsy patients who are already taking the drug should not usually be switched to other products due to the risk of loss of seizure control.

Vital drug

Philip Marsden, chairman of the case decision group for the CMA's investigation, said: 'The companies deliberately exploited the opportunity offered by de-branding to hike up the price for a drug which is relied upon by many thousands of patients.

'These extraordinary price rises have cost the NHS and the taxpayer tens of millions of pounds.'

Pfizer claimed the anti-epilepsy drug was loss-making before it was de-branded, but the CMA found any losses would have been recouped within two months of the price rises.

Both firms have now been given up to four months to reduce their prices.

Pfizer responds

Pfizer said its distribution rights deal with Flynn 'represented an opportunity to secure ongoing supply of an important medicine for patients with epilepsy'.

It added the increased price of the drug was still 25 per cent to 40 per cent lower than the cost of an equivalent medicine by another supplier to the NHS.

Flynn Pharma said it will also appeal against the decision.

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Pharma companies accused overcharging epilepsy drugs 

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