The UK’s competition watchdog has said that drug companies have been ripping off the NHS by buying out potential rivals to their medicines to prevent them from competing, which has led to scandalous price increases to the cash-strapped health service of more than 10,000 per cent.

The Competition and Markets Authority (CMA) said it has levied fines of more than £260 million on pharmaceutical firms that prevented others from offering cheaper versions of their medicines, according to The Guardian.

The scandal, which also involved private equity firm Cinven, which owned one of the drug manufacturers, involved hydrocortisone tablets, which tens of thousands of people rely on to treat life-threatening conditions.

Investigations by the CMA into several pharmaceutical firms found that Auden Mckenzie and Actavis UK – now known as Accord-UK – charged the NHS excessive prices for hydrocortisone for almost a decade.

The CMA reported that Auden Mckenzie paid off ‘would-be competitors’ AMCo, now trading as Advanz Pharma, and another company Waymade, to keep out of the market.

The firm caused a price increase that forced the NHS to pay over £80 for a single pack that previously had only cost £1.

Andrea Coscelli, chief executive of the CMA, said: “These are without doubt some of the most serious abuses we have uncovered in recent years.

“The actions of these firms cost the NHS – and therefore taxpayers – hundreds of millions of pounds.”

Coscelli said that Auden Mckenzie’s decision to increase prices for de-branded drugs meant the NHS had little choice but to pay huge sums of taxpayers’ money for essential and lifesaving medicines.

“These were egregious breaches of the law that artificially inflated the costs faced by the NHS, reducing the money available for patient care,” he said.

“Our fine serves as a warning to any other drug firm planning to exploit the NHS.”

The CMA fined Accord-UK £155 million for the overcharging, which occurred between 2008 and 2018, and also fined its former parent company Allergan a further £66 million for paying Waymade and AMCo to keep out of the market.

AMCo and Waymade were about to launch generic versions of medicines but were paid £21 million and £1.8 million respectively by Auden Mckenzie to keep away from the lucrative market.

The CMA also fined Advanz and its former parent company, the private equity house Cinven, £43 million for its part in the scandal. Waymade was fined £2.5 million.

The ruling means the NHS will now be able to pursue its damages from the firms. A number of other live competition investigations in the pharmaceutical sector are still ongoing

CMA officials recently secured an £8 million repayment to the NHS over price-fixing on the supply of fludrocortisone and fined four companies £3 million for breaking competition law on the antidepressant nortriptyline.

Auden Mackenzie took over the medicine in 2008, when it was a branded product and thus subject to NHS regulatory price caps. The company then de-branded it, freeing it from price controls, and jacked up the prices massively from 70p a pack in April 2008 to £88 by March 2016 for a pack of 10mg tablets.

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