Commercial Advanz Pharma to pay $140M fine in UK for...

Advanz Pharma to pay $140M fine in UK for price hikes on its thyroid drug


Pricing of the drugs have become a contentious issue in both U.K. and U.S. and for one similar case, U.K. has inflicted another fine to reckon with the “unfair” inflation. Advanz Pharma to pay $140M fine in UK for price hikes on its thyroid drug  

The U.K.’s Competition and Marketing Authority (CMA) has warned Advanz Pharma regarding their anti-competitive marketing strategies and slapped the company with more than £100 million ($139.6 million) as a penalty for price appreciation of its thyroid disease tablets, liothyronine, by 1,110%.

CMA, in an investigation, found out that the price of the drug to treat thyroid hormone deficiency was “unfair and excessive” as the company had escalated the price from £20 (around $29) in 2009 to £248 ($345) in 2017.

The fact that the off-patent liothyronine tablets had limited to no competitors, led the company to pull ahead of the self-willed price hikes, authorities stated.

They further added that there seemed to have no significant innovation to support company’s purported price optimization strategy. The production cost didn’t increase much throughout the said time period.

According to CMA, 2006 was the last year before Advanz’s price escalation flight took off, when the U.K.’s National Health Service (NHS) spent £600,000 ($834,375) on the liothyronine tablets. By 2009, this expenditure rose up to £2.3 million (about $3.2 million) which further jumped up to more than £30 million ($41.71 million) by 2016.   

Advanz’s drug was in the “drop list” of NHS in 2015 for which there was risk for patients either suspending the ongoing treatment or paying out of their budget. Moreover, the hypothyroidism patients usually don’t respond well to another treatment, levothyroxine tablets, making liothyronine the only alternative, hence, increasing its demand.         

The total imposed fine is divided among Advanz Pharma (£40.9 million) and two of its former private equity owners HgCapital (£8.6 million) and Cinven (£51.9 million) respectively.

Prior to this, CMA has also issued heavy fines to a clutch of drugmakers, Auden Mckenzie and Actavis UK (known as Accord-UK), for the same pricing-related case, in mid-july, for inflating the cost of generic hydrocortisone tablets. Advanz Pharma and Cinven were also found involved in the above said matter and were charged with £43 million penalty, two weeks ago.

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