UK Reopens Pharma Probes After COVID-19 Delays

By Christopher Cole
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Law360, London (July 20, 2020, 10:05 PM BST) -- The United Kingdom's antitrust enforcer on Monday resumed probes of allegedly anti-competitive market allocation agreements for two drugs used to treat urinary tract infections and nausea, after the investigations largely stalled this spring amid delays due to the novel coronavirus pandemic.

The Competition and Markets Authority, in a pair of announcements, said it will study the supply of nitrofurantoin 50 miligram and 100 mg capsules as well as prochlorperazine 3 mg buccal tablets.

The CMA issued a statement of objections a year ago alleging that AMCo, now Advanz Pharma Services (UK) Ltd., Alliance Healthcare (Distribution) Ltd., Morningside Healthcare Ltd. and Morningside Pharmaceuticals Ltd. breached U.K. and European competition law "by participating in anti-competitive agreements and/or concerted practices" in relation to the supply of nitrofurantoin 50 mg and 100 mg capsules, which treats infections.

According to the CMA at the time, the arrangements from 2014 to at least October 2017 called for Alliance Healthcare to buy equal volumes of the drug from each of two suppliers so that they would not compete.

The authority also alleged at the time that AMCo disclosed sensitive pricing information to Morningside with the aim of reducing competition between them.

In October 2017, the CMA launched an investigation into suspected breaches of competition law by various parties, which "relates to alleged anti-competitive agreements and/or concerted practices in relation to generic pharmaceutical products," the authority said.

Along an almost parallel line, the antitrust enforcer has been looking into the supply of prochlorperazine 3 mg buccal tablets, which help with nausea and vomiting. The CMA said Monday that probe will resume as well.

The CMA in May 2019 alleged that Focus Pharmaceuticals, Medreich, Alliance Pharmaceuticals and Lexon breached U.K. and EU competition law by entering into anti-competitive agreements in relation to the drug's supply to the National Health Service.

Between December 2013 and December 2017, the prices paid by the NHS for the drug rose by around 700% and from 2014 to 2018, the annual costs incurred by the NHS for prochlorperazine increased from around £2.7 million ($3.41 million) to around £7.5 million, even though the number of packs dispensed fell, the authority noted.

According to agency timetables, both pharmaceutical probes were paused April 7 due to the pandemic.

Alliance Healthcare (Distribution) Ltd. told Law360 in an email, "We take competition law very seriously and do not believe that competition law has been infringed by Alliance Healthcare's activities. We are responding in detail to the allegations and defending our position whilst working constructively with the CMA."

The Morningside companies involved "strongly refute the concerns raised by the CMA in its statement of objections, we will continue to work constructively with them to demonstrate Morningside's commitment to patient choice and a competitive market," a spokesperson told Law360 in an email.

Representatives for the other drug companies did not immediately respond to requests for comment Monday.

--Editing by Stephen Berg.

Update: This story has been updated with comments from Alliance and Morningside.

For a reprint of this article, please contact reprints@law360.com.

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