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Pfizer fined $106 million for drug price increase of 2,600% in Britain

By
Allen Cone
Pfizer, with world headquarters in New York, was fined $107 million for increasing the cost of an epilepsy drug as much as 2,600 percent in Britain. FIle photo by pio3/Shutterstock
Pfizer, with world headquarters in New York, was fined $107 million for increasing the cost of an epilepsy drug as much as 2,600 percent in Britain. FIle photo by pio3/Shutterstock

LONDON, Dec. 7 (UPI) -- Britain's antitrust regulator fined Pfizer Inc. a record $107 million Wednesday because of skyrocketing price increases for generic versions of the Epanutin anti-epilepsy drug.

The Competition and Markets Authority announced Pfizer and drug-distribution company Flynn Pharma hiked prices of the drug by up to 2,600 percent for around 48,000 patients in the country in September 2012. Pfizer had transferred distribution rights to Flynn, which sold the medicine by its generic name, phenytoin sodium. Flynn was fined $6.55 million.

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"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," Philip Marsden, chairman of the Case Decision Group for the CMA's investigation, said in a statement. "These extraordinary price rises have cost the [National Health Service] and the taxpayer tens of millions of pounds.''

The NHS spent about $63 million on the anti-epilepsy capsules in 2013 and $50 million in 2014, the CMA said in its August 2015 complaint.

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The prices jumped 25 fold. The 100-milligram packs of the drug soared from $3.53 to $84.69, before dropping to $68.05 starting in May 2014, the CMA said Wednesday.

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Warwick Smith, an official with the British Generic Manufacturers Association, an industry body, told The Wall Street Journal the two companies "broke the virtuous cycle" between innovator and generic companies when drugs sharply fall in price after they lose their patent protection.

Both companies plan to appeal.

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"Phenytoin capsules were a loss-making product for Pfizer and the Flynn transaction represented an opportunity to secure ongoing supply of an important medicine for patients with epilepsy, while maintaining continuity of manufacture," the company said in a statement. "When Flynn launched its product, the company set a price that was between 25 and 40 percent less than the price of the equivalent medicine from another supplier to the NHS which had long been regulated, and appeared to be acceptable to, the Department of Health."

A Flynn spokesman said, "Phenytoin sodium capsules are already less expensive than the alternative equivalent drugs in the U.K. market. It beggars belief that the CMA seeks to punish Flynn for selling phenytoin capsules at a significant discount to phenytoin tablets."

The CMA calculated that, according to Pfizer's figures, all such losses would have been recovered within two months of the price increases.

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"This is the highest fine the CMA has imposed and it sends out a clear message to the sector that we are determined to crack down on such behavior and to protect customers, including the NHS, and taxpayers from being exploited," the CMA's Marsden said.

Phenytoin sodium is sold as Dilantin in the United States.

Other drugmakers have been blasted for soaring prices.

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In 2015, U.S. pharmaceutical executive Martin Shkreli's Turing Pharmaceuticals bought the rights to Daraprim, a half-century-old drug that treats a parasitic infection, and raised the price more than 50-fold.

And Mylan has rocketed the price of its injectable medication EpiPen to more than $600, a six-fold increase from 2007.

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