CMA issues £35m in fines for illegal anti-nausea tablet supply arrangement

(Sharecast News) - The Competition and Markets Authority has fined several pharmaceutical and private equity firms over £35.0m for an illegal arrangement in the supply of important NHS prescription anti-nausea tablets.
According to the CMA, Alliance Pharmaceuticals, Focus and Lexon were involved in an arrangement that restricted competition in the supply of prochlorperazine 3.0mg dissolvable or "buccal" tablets to the NHS between June 2013 and July 2018. Medreic was also said to have been involved in the arrangement between February 2014 and February 2018.

Under the arrangement, Alliance Pharmaceuticals appointed Focus as its distributor, and Lexon and Medreich were paid a share of the profits that Focus earned by selling Alliance's product in return for agreeing not to compete in the supply of prochlorperazine tablets in the UK.

Before entering into the arrangement, the CMA said Lexon and Medreich had been taking steps to launch their own jointly-developed version of prochlorperazine.

From December 2013 to December 2017, the price paid for prochlorperazine by the NHS rose 700% and consequently, between 2014 and 2018, the annual costs incurred by the NHS for prochlorperazine increased from around £2.7m to around £7.5m, even though the number of packs dispensed fell.

The CMA fined the pharmaceutical and private equity firms involved a total of over £35.0m for the relevant periods in which they broke the law, including a £7.9m fine for Alliance Pharmaceuticals, a £7.3m fine for Lexon, a £4.6m fine for Medreich, and a fine for Focus of £15.5m, apportioned between its Advanz and Cinven units.

Medreich's fine was reduced by 40% as a result of it being granted leniency after admitting its involvement in the infringement and cooperating with the CMA's investigation.

As of 0900 GMT, Alliance shares were down 3.53% at 109.40p.