Key facts
- The UK's Competition and Markets Authority (CMA) has won permission to appeal a ruling against Pfizer.
- The case concerns allegations of excessive pricing for the anti-epilepsy drug phenytoin sodium.
- The legal battle has lasted for 10 years.
- The Competition Appeal Tribunal (CAT) had previously overturned the CMA's decision.
- The court found the CAT was wrong to set aside the CMA's decision and mischaracterized its findings.
- The CMA previously fined Pfizer £63.3m and Flynn Pharma £6.7m in 2022.
The UK's Competition and Markets Authority (CMA) has secured permission to appeal a decision that had favored US pharmaceutical giant Pfizer in a decade-long legal dispute over alleged excessive pricing of an anti-epilepsy drug.
The Court of Appeal ruled that the Competition Appeal Tribunal (CAT) was incorrect in setting aside the CMA's original decision concerning the pricing of phenytoin sodium, a medication used to treat epilepsy. The court found that the CAT had erred in its assessment of the CMA's findings, stating that the tribunal was "wrong to set aside the [Competition and Market’s] decision" and that the CAT "failed to engage with, or mischaracterised, the CMA’s decision on critical issues."
This judgment marks a significant development in a legal battle that began in 2013. The CMA initially investigated allegations that Pfizer and its UK distributor, Flynn Pharma, had abused their market position by charging the NHS prices up to 27 times higher than previously standard. Pfizer had sold its UK distribution rights for the drug to Flynn Pharma in 2012, and subsequently manufactured and sold the drug to Flynn at significantly increased prices.
Prior to 2012, the NHS spent approximately £2.3 million annually on the drug. Following the change in distribution, spending soared to over £50 million in 2013 and remained above £40 million in 2014. In 2016, the CMA imposed fines of £84.2 million on Pfizer and £5.2 million on Flynn Pharma, ordering price reductions. Both companies appealed, and the CAT eventually sent the case back to the CMA. The CMA reopened its investigation in 2021, citing a loophole exploited by de-branding the drug, and issued revised fines in 2022: £63.3 million for Pfizer and £6.7 million for Flynn Pharma. Both companies appealed again, and the CAT ruled in their favor in 2024, leading to the CMA's current successful appeal.
Juliette Enser, executive director of competition enforcement at the CMA, hailed the judgment as "important," emphasizing the drug's vital role for thousands of epilepsy patients and reiterating the CMA's finding that the companies exploited their positions. The CMA will now make further submissions to the court before a final decision is made on whether to reinstate the original fines and pricing orders.