Britain’s competition watchdog has fined Pfizer a record $106 million for its role in ramping up the cost of an epilepsy drug by as much as 2,600 percent. USA TODAY
A British regulator on Wednesday hit U.S. pharmaceutical giant Pfizer with a record $106 million fine for imposing a 2600% price hike on an anti-epilepsy medication, the latest episode in widening public controversy over prescription drug prices.
New York-based Pfizer broke a competition law by “charging excessive and unfair prices” in the United Kingdom for phenytoin sodiumcapsules in Sept. 2012, after the drug was deliberately de-branded, said the Competition and Markets Authority, Britain’s top regulator.
Pfizer (PFE) denied the allegation and said it would appeal.
The regulator said the cost of the anti-epilepsy drug used by an estimated 48,000 U.K. patients to prevent and control medical seizures jumped from $3.57 for 100-milligram packages of the medication to $85.06. The price was ultimately reduced to $68.05 in May 2014, the CMA said.
As a result, Britain’s National Health Service annual spending for the drug rose from roughly $2.5 million in 2012 to approximately $63 million the following year, the CMA said.
Epilepsy patients who have already been using phenytoin sodium capsules usually should not switch to alternative medications, so the health service was forced to pay the higher prices, the regulator said.
“Businesses are generally free to set prices as they see fit but those holding a dominant position should not abuse this situation and set prices that are excessive and unfair,” Philip Marsden, chairman of the CMA’s case decision group for the investigation, said in a statement issued with the announcement.
Pfizer was given 30 working days to four months to cut prices for the drug. The regulator also said it would be allowed to charge prices that are profitable but not excessive.
Pfizer said it refutes the CMA’s findings. The medication was “a loss making product” for the company, Pfizer said in a formal statement. The fine and ruling “highlights real policy and legal issues concerning the respective roles of both the Department of Health and the CMA, in regulating the price of pharmaceutical products in the U.K.,” Pfizer added, saying it will seek clarity on the issues as part of its appeal.
Mylan is drawing fire for passing off massive price hikes for its EpiPen allergy treatment. But it’s far from being the drug company with the most pricing power.
The fine comes amid additional complaints and investigations into price hikes on drugs. Mylan drew criticism earlier this year over an increase in the cost of EpiPen, a life-saving anti-allergy injection, which rose to about $600 for a two-pack, up from about $100 in 2009. Similarly, Turing Pharmaceuticals and Martin Shkreli, the company’s former CEO, became subjects of drug pricing investigations following a price hike that raised the cost of a drug that treats dangerous infections in people weakened by AIDS and cancer from $13.50 to $750 per pill.