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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: 2, Interesting) by Tara Li on Friday December 09 2016, @04:36PM
Are these fines big enough to actually do anything? After all, if you make $1B profit, and get hit with a $100M file, you're still $900M ahead - hell, if it's not actually against the *law*, you could argue that the corporations have a fiduciary responsibility to do it, to deliver as much value to the shareholders as possible.
And yet - I really don't want a government agency deciding how much a drug is allowed to cost, either. That's just asking for a race to the bottom as interest groups whine about how deserving their group is that is disproportionately in need of a particular drug... First it will be forcing the price so low that *no* company will be interested in making it, then will come legislative requires forcing a company to make it...
(Score: 0) by Anonymous Coward on Friday December 09 2016, @06:05PM
Businesses intentionally break the law all the time. If the gains are greater than the potential losses they have no reason not to. See VW for a recent but not unique example.-
The law doesn't mean squat. As always, it's all about money.
(Score: 2) by fido_dogstoyevsky on Saturday December 10 2016, @06:21AM
[the government] will be forcing the price so low that *no* company will be interested in making it, then will come legislative requires forcing a company to make it
Just the cost of doing business as a drug manufacturer.
It's NOT a conspiracy... it's a plot.