Drugs firm Actavis UK overcharged the NHS by hiking the price of a life-saving drug by more than 12,000%, the competition watchdog alleges.
It said the amount charged for 10mg hydrocortisone tablets rose to £88 per pack by March 2016 from 70p when a branded version of the drug was sold by a different company prior to April 2008.
There was also a 9,500% increase for 20mg tablets, the Competition and Markets Authority (CMA) said.
The watchdog claimed that Actavis – formerly known as Auden McKenzie – broke competition law by charging “excessive and unfair prices”.
Teva, the Israeli-based company that recently acquired the company, said it “intends to defend the allegations”.
The CMA’s provisional findings come a week after it fined US giant Pfizer and distributor Flynn Pharma a total of nearly £90m in a separate overcharging case. Both firms dispute the CMA’s conclusions.
Hydrocortisone tablets are used to treat people who suffer from conditions where their adrenal glands do not produce enough natural steroid hormones, such as Addison’s disease – which is life threatening.
More than 900,000 packs of hydrocortisone tablets were dispensed in 2015 and NHS spending on these drugs had climbed to £70m – up from £522,000 prior to April 2008.
The case, like others, centres on the way drugs companies can charge more for generic or de-branded drugs because, unlike branded drugs, they are not subject to price regulation.
Andrew Groves, CMA senior responsible officer, said: “This is a lifesaving drug relied on by thousands of patients, which the NHS has no choice but to continue purchasing.
“We allege that the company has taken advantage of this situation and the removal of the drug from price regulation, leaving the NHS – and ultimately the taxpayer – footing the bill for the substantial price rises.”
The CMA said its findings, after a nine-month probe, were provisional and that no conclusion should be drawn at this stage that there has in fact been any breach of competition law.
It has the power to fine firms found to have broken the rules up to 10% of annual worldwide group turnover.
Earlier this year, drugs giant GlaxoSmithKline was among firms hit with a £45m penalty after a “pay-to-delay” scandal surrounding blockbuster anti-depressant drug Seroxat.
Teva defended the role of generic drugs, saying competition from these medicines saved the NHS in England and Wales £13.5bn a year overall.
It added: “Although the pricing of the acquired Actavis product (hydrocortisone) under investigation was never under Teva’s effective control, Teva believes that intervention by the CMA in prices for generic medicines raises serious policy concerns regarding the roles of both the CMA and the Department of Health.”