Pfizer Fined a Record $107 Million for Ramping Up Epilepsy Drug Price by as Much as 2,600%
By Alex Keown, BioSpace.com Breaking News Staff
LONDON – Pfizer (PFE) has been slapped with a $107 million fine in Britain for a price increase of its epilepsy drug. The fine was levied by Britain’s Competition and Markets Authority. The fine marks a record amount by the watchdog organization, Reuters reported this morning.
The CMA said Pfizer increased the price of the epilepsy drug Epanutin in 2012 from £2.83 to £67.50. The price of the100 mg packs were later reduced to £54 in 2014, Reuters said. The price hike caused Britain’s National Health Service to increase spending on the drug from £2 million in 2012 to £50 million in 2013. The medication is used by about 48,000 people in Britain, the BBC reported. Phenytoin sodium capsules are used in the treatment of epilepsy to prevent and control seizures.
The CMA said prices paid in Britain were “many times higher” than elsewhere in Europe, Reuters said.
Pfizer sold the U.K. rights to Epanutin (Phenytoin sodium capsules are used in the treatment of epilepsy to prevent and control seizures) in 2012 to Britain’s Flynn Pharma. Flynn Pharma was also fined £5.2 million by the CMA. After Flynn Pharma acquired rights to the drug, the company de-branded the drug, which allowed the price to increase because the drug was “no longer subject to a pricing scheme agreed between the NHS and the drugs industry,” the CMA said in a statement.
Since 2012, Pfizer continued to manufacture the drug and supplied it to Flynn Pharma, but at higher prices. The CMA said the price Pfizer charged Flynn increased between 780 percent and 1,600 percent. Flynn then increased its prices between 2,300 and 2,600 percent, the CMA 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,” Philip Marsden, chairman of the CMA’s case decision group, said in a statement.
Marsden added that there was no justification for the price increase as the epilepsy drug is an old treatment and there has “been no recent innovation or significant investment.”
In addition to the fine, the CMA said the price of the drug must be reduced to an “acceptable level.” Lawyers for both companies argued that a price reduction could trigger claims for redress by customers who paid the higher prices, Reuters said. Pfizer and Flynn have between 30 days and four months to meet that requirement, the BBC said.
Pfizer plans to appeal the fine. The company said the epilepsy medication had been “loss-making” and it was forced to consider whether it would continue to supply the drug in Britain. Additionally, Pfizer told Reuters the price set by Flynn was “25 to 40 percent less” than medications from another supplier.
“Pfizer believes the CMA’s findings are wrong in fact and law and will be appealing all aspects of the decision,” a company spokesperson told the BBC.
The Pfizer fine is the latest in the CMA’s attempts at addressing concerns in the pharmaceutical industry. In February, the CMA slapped a $53 million fine on GlaxoSmithKline (GSK) for allegedly paying millions to drug manufacturers to keep generic drugs out of the U.K. According to that fine, GSK paid more than $72 million between 2001 and 2004 to companies such as Generics UK Limited and Alpharma Limited to prevent generics of paroxetine to enter the country. GSK manufactures Seroxat, its own antidepressant version of paroxetine.
In addition to the Pfizer price-hike issue, the CMA is looking at four other investigations concerning the pharmaceutical industry, Reuters said.