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from the that's-another-fine-mess-you've-gotten-into dept.
Reuters reports on a record 84 million pound fine (about $107 million) for its role in raising the cost of a generic epilepsy drug by up to 2600%:
The Competition and Markets Authority (CMA) also fined Flynn Pharma 5.2 million pounds for overcharging for phenytoin sodium capsules, following a dramatic price hike in 2012. The CMA's ruling comes amid a growing debate on both sides of the Atlantic about the ethics of price hikes for old off-patent medicines that are only made by a few firms and where there is little competition. U.S. drugmaker Turing Pharmaceuticals, led at the time by hedge fund manager Martin Shkreli, caused outrage last year by raising the U.S. price of Daraprim, an old anti-infective drug, by more than 5,000 percent to $750 a pill.
[...] Pfizer used to market the medicine under the brand name Epanutin but sold the rights to Flynn, a privately owned British company, in September 2012. It was then debranded, meaning that it was no longer subject to price regulation, and the price soared. "The companies deliberately exploited the opportunity offered by debranding to hike up the price for a drug which is relied upon by many thousands of patients," Philip Marsden, chairman of the CMA's case decision group, said on Wednesday. "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."
So, ironically, by turning the drug into a "generic" under UK regulations, they were able to jack the price up to extreme levels. Pfizer plans to appeal the ruling. The Guardian has further details:
Pfizer defended its actions, saying the drugs were loss-making before they were debranded and distributed through Flynn Pharma. It also argued that the price was less than that of the equivalent medicine from another supplier to the NHS.
A spokesman for the CMA said Pfizer recouped its losses on the medication within two months, adding that the price of other drugs did not permit the companies fined to charge "excessive and unfair prices".
One thing I wonder about such fines is whether they can possibly be effective. Even if they manage to hurt a pharmaceutical company's bottom line in the UK a bit, without some sort of international standard regulation of drug pricing, won't they just pass any costs of litigation onto consumers in the U.S. or somewhere else by hiking the price on this or other drugs even more?
(Score: 3, Interesting) by Runaway1956 on Friday December 09 2016, @04:36PM
How about doubling that fine, each day that the prices remain that high? The fine gets reduced by however much they reduce the prices. FFS, governments need to tame big business. I don't mean sleep with big business, but TAME big business.
(Score: 2) by ikanreed on Friday December 09 2016, @04:44PM
The EU has been pretty consistent about doing exactly that to keep corporations in line.
I don't know if post-brexit, tory-controlled UK will do the same, but they're not as far gone with free-market obsessed lunatics as the American republicans.
(Score: 3, Insightful) by frojack on Friday December 09 2016, @06:35PM
Why would you couch that in terms of free-market bashing when there is not any free market in the entire field of medicine? The free market in medicine has been outlawed entirely in the US, the EU, and the UK.
Think you can start a company and make generic versions of drugs that have expired patents?
Guess again. It will take you 5 years to get government permits to market drugs. It will take 10 years to clear the lawsuits that you will attract.
There is no free market in drug manufacture and sales.
No, you are mistaken. I've always had this sig.
(Score: 2) by ikanreed on Friday December 09 2016, @06:41PM
Just because it doesn't exist doesn't mean there aren't idiots making laws with the assumption that it does.
Republicans are very dumb.
(Score: 2) by hemocyanin on Friday December 09 2016, @04:48PM
You're mean. exponential on one side, simple subtraction on the other. ;-)
The fine should be big, but I sometimes wonder if the government loves this scenario. Government is basically a third wheel in this transaction but it makes a tidy profit by fining the gouger. Next, the fines aren't typically big enough to damage the company, so it doesn't honestly mind (despite woe-is-me public protest) when compared to all the other times it got away with gouging without consequence. The only party that really needs help, the consumer, is the one who gets totally screwed - the consumer either forgoes the medication or pays the massive hike and never gets reimbursed - it's like a hidden sales tax.
(Score: 2) by bob_super on Friday December 09 2016, @05:34PM
Did you miss the part where the UK government actually provides healthcare to the Queen's subjects?
And the healthy subjects provide the tax which pays for the government.
So the government isn't a random third party, it's got a vested interest.
(Score: 2) by hemocyanin on Saturday December 10 2016, @01:22AM
That's a fair point. How about when this kind of thing happens in the US though?
(Score: 3, Funny) by Azuma Hazuki on Friday December 09 2016, @06:18PM
Now what kinda pinko Commie lib'rul terr'ist atheist Mexican Muslim Jew hippie bullshit're YEW spoutin' boy?! Free market uber alles! Burdensome regulation! Job creators! The poor deserve their suffering! Wharrrgarbl!
...gee, it's almost like you're getting halfway reasonable in your old age. Watch your back, lest our resident alt-right divas start calling you "cuck."
I am "that girl" your mother warned you about...
(Score: 2) by Runaway1956 on Friday December 09 2016, @06:28PM
Alright - free market. I'll go with that. Free market - no more patent and copyright encumbered monopolies for the pharmaceuticals. They make a new drug, and as fast as they can get it into production, THERE ARE GENERIC VERSIONS AVAILABLE!!
Pharmaceuticals really don't want a free market, and we both know that.
(Score: 0) by Anonymous Coward on Friday December 09 2016, @11:20PM
This is the stupidity of how the NHS has been carved up into discrete units, though; if the Department of Health rocked up to Pfizer or whoever and said "We need $BIGNUM of those and we'll pay a penny each, and if you don't play ball we'll piss off to India and ask one of their pharmaceutical companies" then you can guarantee it wouldn't take long for them to roll over. What we have is the ridiculous situation where each individual hospital or trust (i.e. a group of hospitals) each go to *predetermined suppliers* and buy stuff in piles that are orders of magnitude smaller, each getting quoted a different price and sometimes these have *huge* variations.
The latest wheeze is Sustainability and Transformation Plans (STPs), which will ultimately render down to "who can we afford to sack and who can "absorb" their work". Sensible procurement at a national level could save a metric fuckton of money, but of course that isn't the way to get "inducements" from the private sector, is it? The NHS is suffering the death of a thousand cuts and by the time people wake up to this, it'll be too late to save it.
(Score: 2) by edIII on Friday December 09 2016, @11:11PM
How about we don't fine the company at all, but fine every executive above a certain level 3% of yearly salary per day until the price changes?
Make the executives and shareholders have to pay directly out of their own pockets as individuals.
I would take it further too, like registering sex offenders. We should register avaricious parasites so that when they go to other companies they need to formally inform people that they're pieces of avaricious shit :)
Technically, lunchtime is at any moment. It's just a wave function.
(Score: 2) by Thexalon on Friday December 09 2016, @11:23PM
Why? These people aren't exactly quiet about what they're doing. They know they're saying the equivalent of "Your money or your life?", and they are compensated accordingly. And they brag about what they're doing in these obscure things called "quarterly reports".
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 2) by edIII on Saturday December 10 2016, @01:05AM
*sigh*
You're right.
Technically, lunchtime is at any moment. It's just a wave function.