Drug Pricing Scrutiny Increases in Europe

Within Europe, drug pricing regulations are in place to ensure affordable access to drugs; however, these regulations do not mean that more expensive drugs are ‘off the table’ for patients or that pharma companies won’t ever increase prices of currently available medicines (1). External reference pricing is one way in which a European country can have an idea of the ‘reasonable’ cost of a drug. This policy allows governments to compare the price of a drug to that charged in other countries to gain a benchmark price.

In 2016, Pfizer and its distributor Flynn Pharma had a record fine imposed upon them for excessive price hikes to the United Kingdom’s National Health Service (NHS) for phenytoin capsules, which were priced much higher than in any other European country at the time, as determined by the UK’s Competition and Markets Authority (CMA). However, this decision was appealed, and in 2020, the Court of Appeal dismissed the attempts by the CMA to reinstate the fines (2).

In July 2021, however, several cases were raised against pharma companies regarding price hikes. Most recently, the CMA issued a fine of more than £100 million (€117 million/$139 million) to Advanz and its former private equity owners after an investigation demonstrated ‘excessive and unfair prices’ were being charged for liothyronine tablets (3). A little earlier in the month, the CMA had also imposed fines worth £260 million (€306 million/$361 million) on a number of drug companies for price increases on a steroid treatment by more than 10,000% (4). Additionally, the Dutch authority—Netherlands Authority for Consumers and Markets (ACM)—has issued a fine worth €19.5 million ($23 million) on the Italian pharmaceutical company Leadiant Biosciences for excessive pricing of a drug to treat cerebrotendinous xanthomatosis, which the company had raised by 1800% (5).

Whether or not these fines are appealed against or are upheld, it is apparent that authorities are closely examining pricing strategies and are sending a clear message to the industry that infringements of the Competition Act 1998 will not be tolerated.

References

1. WHO, WHO Guideline on Pharmaceutical Pricing Policies, Guideline, 1 Jan. 2015.
2. Simmons and Simmons, “Appeal Court Dismisses CMA Attempt to Reimpose Fines on Pfizer/Flynn,” Insight Article, 10 March 2020.
3. BBC, “Drug Firm Fined for Huge Price Rise that Hit NHS,” Press Release, 29 July 2021.
4. K. Beioley, “Pharma Companies Fined After 10,000% Price Rise for Life‑Saving Drug,” Financial Times, 15 July 2021.
5. B. Nijhof, “Dutch Competition Authority ACM Fines Pharmaceutical Manufacturer €19.5 Million Over Price Increases of More than 1800%,” TaylorWessing, 22 July 2021.

About the Author

Felicity Thomas is the European editor for Pharmaceutical Technology Group.

Article Details

Pharmaceutical Technology Europe
Vol. 33, No. 8
August 2021
Page: 6

Citation

When referring to this article, please cite it as F. Thomas, “Pricing Scrutiny Increases” Pharmaceutical Technology Europe 33 (8) 2021.