Landmark judgment upholds CMA's battle against unethical Pharmaceutical pricing practices

In a resounding victory for ethical market practises and consumer rights, the Competition and Markets Authority (CMA) has secured a landmark judgement against exploitative pricing within the pharmaceutical sector.

The decision, issued by the Competition Appeal Tribunal, bolsters the CMA's efforts in reining in unethical pricing strategies that undermine both public health and fair competition, a press release by the government said. The judgement centres around the case of liothyronine tablets, a crucial medication for treating thyroid hormone deficiency.

Liothyronine Tablets, originally developed in the UK during the mid-1950s under the brand name 'Tertroxin', have been at the heart of a prolonged battle between ethical practises and profiteering. Advanz Pharma, the exclusive supplier of liothyronine tablets, initiated a staggering price increase, driving the cost of these vital medical products up by an astounding 1,000 per cent.

Over the span of eight years, between 2009 and 2017, prices skyrocketed from a modest £20 per pack to an eye-watering £248 per pack. This drastic price escalation triggered alarm bells, ultimately resulting in an astronomical £84 million fine imposed on Advanz Pharma.

The Executive Director of Enforcement at the CMA, Michael Grenfell, expressed his satisfaction with the Tribunal's verdict, emphasising the importance of responsible pricing strategies.

Grenfell stated: "We are delighted that the Competition Appeal Tribunal has unanimously upheld the CMA's infringement findings."

He continued: "Today's landmark judgement reinforces the need for companies to thoughtfully consider their pricing strategies and opens the door for the NHS to pursue compensation. The CMA remains steadfast in its commitment to kerbing companies that misuse their market power in ways that negatively impact people and the broader economy."

The CMA's decisive determination was originally handed down on July 29, 2021, asserting that Advanz's aggressive pricing tactics constituted an abuse of its dominant market position, violating competition laws. As a direct result of the recent judgement, Advanz Pharma, along with its former owners HgCapital and Cinven, now faces an unprecedented combined fine exceeding £84 million for their role in these illicit practices.

All three entities – Advanz Pharma, Cinven and HgCapital – vehemently contested the CMA's verdict and the subsequent fines. They vehemently challenged the contention that the prices set for liothyronine tablets were exorbitant and unjust.

However, their appeals were unambiguously rejected by the Tribunal. In a unanimous ruling, the Tribunal echoed the CMA's conclusion that Advanz had indeed abused its dominant market position, orchestrating excessive and inequitable pricing for essential medication from 2009 to 2017.

The Tribunal's judgement laid bare a meticulously calculated strategy employed by Advanz to exploit the lack of regulatory and competitive constraints in the pharmaceutical market. This strategy, though lucrative for the company, bore dire financial implications for the National Health Service (NHS).

Prior to the implementation of Advanz's pricing tactics in 2006, the NHS expended a modest £600,000 on liothyronine tablets. However, by 2009, this expenditure had surged to over £2.3 million, reaching an alarming £30 million by 2016.

These staggering figures underscore the profound financial strain imposed on the NHS due to the artificially inflated prices of this indispensable medicine, the release stated.

For those seeking an in-depth understanding of the CMA's investigation into the unconscionable pricing practices of liothyronine tablets, a comprehensive report is available on the CMA's official website. This report outlines the meticulous examination conducted by the CMA, delving into the intricate details of the case, the regulatory framework, and the implications for the healthcare system and consumers.

The Competition Appeal Tribunal's ruling in favour of the CMA serves as a watershed moment in the ongoing battle against exploitative practices in the pharmaceutical sector. As regulatory bodies continue to tighten their grip on unethical pricing manoeuvres, this judgement sends a clear message to companies that misuse their market power at the expense of public health and fair competition.

With this landmark decision, the CMA reaffirms its commitment to safeguarding the interests of consumers and maintaining a level playing field in the marketplace.