Drug firm Aspen Pharmacare has offered to pay the U.K.’s National Health Service (NHS) £8 million (U.S. $9.7 million) as part of a deal with the country’s competition regulator following suspicions that the company paid rival firms to delay marketing a vital medicine so it could retain its market dominance.
It is the first time the regulator has secured a direct payment for the NHS as a result of anti-competitive behavior by one of its drugs suppliers.
The Competition and Markets Authority’s (CMA) investigation into Aspen began in 2016 over suspicions that the firm had paid off two rival companies to stop them entering the market.
The deal left Aspen as the sole supplier of fludrocortisone, an NHS prescription-only drug used to treat patients with Addison’s disease, and gave the company the ability to set higher prices without facing any competition.
According to the CMA, Aspen recently approached the regulator with a settlement offer to try to resolve the case.
Andrea Coscelli, the CMA’s chief executive, said in a statement: “We consider it unacceptable for the NHS—and the taxpayers who fund it—to have to pay millions of pounds more than they should for this life-saving drug.”
In a statement to investors, the company said the commitments it made, including the payment to the NHS, did not “constitute an admission of any wrongdoing by Aspen” under EU competition law.
However, it said it had admitted liability “for entering into an agreement to acquire a potential competitor in fludrocortisone with the consequence that the conclusion of this agreement resulted in anti-competitive behaviour.”
As part of the settlement package, Aspen will also commit to ensuring that, in future, there will be at least two suppliers of fludrocortisone in the United Kingdom so that the NHS has the opportunity to secure better value for money when purchasing the drug.
Aspen might also have to pay an additional £2.1 million (U.S. $2.54 million) fine if the CMA formally decides the company broke EU competition rules. The regulator’s investigation is ongoing and includes the other two unnamed companies involved, which could also face sanctions.
If the CMA decides to take proceedings further, it will issue a statement of objections as soon as Sept. 2. This gives the parties notice of a proposed infringement decision and allows them the opportunity to respond to the regulator’s proposed findings.
The CMA also confirmed it currently has unrelated investigations open regarding six other pharmaceutical drugs on the market.
Neil Hodge is a freelance business journalist and photographer based in Nottingham, United Kingdom. He writes on insurance and risk management, corporate governance, internal audit, compliance, and legal issues.
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