The price of migraine drug prochlorperazine rose 700% in four years
(Picture: PA Archive)Private equity group Cinven has been hit with a third fine linked to price gouging on drugs sold to the NHS.
The Competition and Markets Authority today fined four drug companies a collective £35 million, with part of the fines passed on to the owners of one business. Cinven will share a £15.5 million fine due to its historic ownership of drug distributor Focus.
A CMA investigation found that Focus struck a profit sharing agreement with rival distributors to ensure it did not face competition supplying an anti-nausea drug. The price of prochlorperazine, which is used to treat nausea, dizziness and migraines, subsequently rose by 700% in four years.
CMA CEO Andrea Coscelli said: “The size of the fines reflects the seriousness of this breach. These firms conspired to stifle competition in the supply of this important medication, so that the NHS - the main buyer of the drugs - lost the opportunity for increased choice and lower prices.”
The ruling marks the third time Cinven, which traces its roots back to the British coal miners pension scheme, has been fined in relation to drug price fixing in the last year. It was fined £20.9 million last July as part of a probe into overcharging the NHS for hydrocortisone tablets and was fined £51.9 million in an investigating into inflated costs of thyroid tablets.
Cinven, which also owns companies including Kurt Geiger shows, owned Focus briefly through its AMCo business, which it sold in 2015.
Advanz, which owned Focus after Cinven, was also fined for its part in the prochlorperazine saga. Like Cinven, it has now been fined three times by the CMA in relation to price manipulation.
Advanz said it “utterly disagrees” with today’s ruling and will be appealing.
A spokesperson said: “We believe the CMA has misunderstood the context in which Focus Pharma sought to ensure the cost effective and regular supply of this medicine to the market.”
Cinven declined to comment.
Advanz and Cinven are both appealing previous CMA fines.
Alliance Pharma, which licensed the drug to Focus, was also hit with a fine. It said: “Alliance fundamentally disagrees with the CMA’s finding and confirms that it did not participate in, or profit from, any market sharing arrangement and refutes any involvement in the alleged competition law infringement.”
Medreich, another company fined as part of the probe, said: “We, Medreich Group, take the details of this decision seriously, and are committed to ensuring all our affiliates implement reoccurrence prevention measures and reinforce compliance with all relevant laws and regulations.”
