The Court of Appeal has delivered a significant blow to Pfizer and Flynn Pharma, ruling that their practices in charging excessive prices for the epilepsy drug phenytoin were indeed unlawful. In a detailed judgment, the Appeal Court upheld the Competition and Markets Authority's (CMA) 2022 decision, which imposed fines totalling approximately £70 million on the two companies for abusing their dominant market positions between 2012 and 2016.
The case centred on an investigation into Pfizer's and Flynn Pharma's pricing of phenytoin sodium capsules. The CMA found that these companies exploited their control over the market, charging NHS patients significantly more than was necessary. The original decision noted that prices rose by a staggering 780-1,600% between 2012 and 2016, with Pfizer supplying the drug to Flynn at inflated rates before selling it to wholesalers and pharmacies.
Although the Competition Appeal Tribunal (CAT) initially agreed with the CMA's assessment of the companies' actions, it attempted to substitute its own reasoning and later overturned the decision. The Court of Appeal has now rejected this approach, stating that the CAT 'misread, or mischaracterised, the CMA’s decision on critical issues'.
Juliette Enser, Executive Director of Competition Enforcement at the CMA, highlighted the importance of this judgment in ensuring fairness and transparency in competition law enforcement. She stressed that phenytoin is a vital medication for many patients, and it's unacceptable for companies to exploit their market positions for financial gain.
The NHS spent approximately £50 million on phenytoin capsules in 2013 alone – a stark increase from the £2 million spent in 2012. The CMA's original decision aimed to hold these companies accountable for their actions and to protect patients from excessive prices. The Court of Appeal's ruling will likely have significant implications for Pfizer, Flynn Pharma, and the broader pharmaceutical industry.
As the case continues, the CMA will make further submissions to the Court before a final ruling on whether to reinstate its original decision and fines. This judgment serves as a reminder of the scrutiny applied to competition law enforcement in the UK, particularly when it comes to essential medicines.