Price-fixing scandal a body blow to the pharma sector, warn comms experts

Claims that two British pharma firms colluded to keep the prices of lifesaving medicines artificially high, costing the NHS millions as a result, are a "reputational nightmare" for the sector, comms experts said last night.

Pic credit: Moussa81/Getty Images
Pic credit: Moussa81/Getty Images

The warning was made in response to an announcement by the Competition and Markets Authority (CMA) that it suspects Auden Mckenzie and Waymade of having broken the law in fixing the price of hydrocortisone tablets.

The medication is the main form of treatment for patients with Addison's disease, a rare disorder where the adrenal glands do not produce enough hormones, which can be fatal.

The CMA began an investigation into the two companies in 2017, amid suspicions of anti-competitive agreements.

Soaring costs to the NHS

Last week the government agency announced that it "has provisionally found that, from July 2011 to April 2015, the sole supplier of hydrocortisone tablets in the UK, Auden Mckenzie, and its rival, Waymade, entered into anti-competitive agreements".

The announcement added: "This may also have involved Auden Mckenzie abusing its dominant position by making monthly payments to Waymade not to enter the market."

This resulted in the NHS being denied a choice of supplier and the potential savings that could result from increased competition, according to the CMA.

"From 2011 to 2015, while Auden Mckenzie remained the sole supplier of 20mg hydrocortisone tablets, charges to the NHS rose from around £46 to £90 for a pack of 30 tablets, increasing the annual costs incurred by the NHS for the medicine from £1.7m to £3.7m," it said.

Reputational damage

Jayme McCormick, senior vice-president, global health, at Cullari Communications Global, told PRWeek: "This is a reputational nightmare and yet another huge blow to the pharmaceutical industry at a time when the high cost of drugs is already under intense scrutiny."

She added: "As an industry, we need to exhibit transparency and better communicate how we are working in the best interest of patients."

Her concerns were echoed by Paul Tanner, chairman of healthcare agency 90TEN.

"The pharmaceutical industry took a reputational battering over the late 90s and early noughties over inappropriate practices, which could be seen to be anti-competitive," he said.

"To hear the allegations that Auden Mckenzie and Waymade may have been taking part in anti-competitive behaviour of this kind is really disappointing and takes the industry back 10 years in the eyes of the general public."

In terms of how the companies might salvage their reputations, Tanner suggested that if the allegations turn out to be true, "Auden Mckenzie and Waymade should be making an open apology to the NHS and patients affected."

He added that they should also "provide some firm financial commitments to supporting patients living with Addison’s disease that can, in some small way, rectify the damage caused."

Fighting their corner

Waymade, in a statement in response to the CMA’s provisional findings, said: "Waymade PLC will review the CMA’s provisional findings closely with its legal advisers, to understand the CMA’s concerns around the historic supply agreement."

The company "is confident that the timing of Waymade PLC bringing its product to the market did not influence the cost of the drugs to the NHS", it added.

Teva Pharmaceutical Industries did not respond to a request for comment.


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