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The Court of Appeal yesterday upheld a ruling by the Competition and Markets Authority (CMA) and the Competition Appeal Tribunal (CAT) that Auden Mckenzie and Actavis UK charged excessive and unfair prices for hydrocortisone tablets between 2008 and 2018.

The companies increased the price of the drug, which cost £1 a pack in 2007 and is used to treat life-threatening conditions such as Addison’s disease, to over £70 a pack in 2016. Auden Mckenzie bought the licences for hydrocortisone tablets in 2008.

The company was found to have “de-branded” the drugs and re-launched them as generics at around £4 a pack before increasing the prices to £72.

In 2015, the hydrocortisone business was transferred intra-group to Accord-UK Limited, formerly Actavis UK Limited, and the CMA found the parent companies Allergan plc, formerly Actavis plc, Accord Healthcare Limited and Intas Pharmaceuticals Limited were “liable for the excessive and unfair pricing during their ownership periods”.

Two abuses of dominance

The CAT ruled Allergan could not be held liable as parent between March 10 and August 1, 2016 because its ownership of Actavis UK Limited “was subject to ‘hold-separate’ commitments given to the European Commission to secure merger control clearance for the sale of its generics business”.

The CMA found “two abuses of dominance”, one in relation to 10mg and 20mg hydrocortisone tablets and two anti-competitive agreements, one for 20mg tablets and one for 10mg tablets.

The CMA said its “findings on the existence of the 20mg agreement were not appealed” and the CAT upheld Actavis UK’s £2.8 million fine for the 20mg agreement in 2024.

“The counterparty to the 10mg agreement was the AMCo undertaking, comprising the Amdipharm group and (for their ownership periods) its former parent Cinven and its current parent Advanz Pharma Corp Limited,” the CMA said.

The CAT heard the appeals against the 10mg agreement and made two judgements. The first was to uphold the decision and rule “that all the grounds of appeal failed”.

The second was to allow the appeals “because the CMA did not fully put its case to a witness during cross-examination at trial”. In September 2024, the Court of Appeal overturned that finding and upheld the CMA’s ruling that there had been “cartel infringement relating to an illegal market sharing agreement in the supply of an essential medicine”.

NHS spending on hydrocortisone went from £500,000 in 2007 to £80 million in 2016

Between 2007 and 2016, NHS annual spending on hydrocortisone tablets increased from £500,000 to more than £80 million. The CMA said the price increases “did not reflect any increase in costs or investment in the drug”. 

“When other firms began to develop their own hydrocortisone tablets Auden/Actavis bought them off,” the CMA added.

“This allowed it to delay competition that could have brought prices down. Although other firms did eventually enter the market, Actavis UK retained market power and was able to continue charging excessive and unfair prices.”

In July 2021, the CMA ruled Auden Mckenzie and Actavis UK “abused a dominant position by charging excessive and unfair prices for hydrocortisone tablets between 2008 and 2018” and found they entered into anti-competitive agreements with its competitors Waymade and AMCo.

That culminated in fines totalling £266.5 million, £155.2 million for excessive and unfair pricing abuses and £111.3 million for anti-competitive agreements. The total penalties came to about £240 million after Allergan’s penalty was reduced “to reflect the CAT’s findings on the hold-separate period”.

Auden Mckenzie and Actavis UK appealed against the CMA’s decision that there had been “excessive and unfair pricing infringements” but the CAT rejected those appeals in 2023 and upheld the penalties “subject to a £26 million reduction to the penalty for a former parent company to reflect a period when it did not control the business”.

Auden Mckenzie and Actavis UK appealed against the CAT’s decision to the Court of Appeal who dismissed their cases. The Court of Appeal found “none of their grounds of appeal get near to displacing the CMA’s and the CAT’s conclusions on the infringements”.

However, the Court of Appeal said the companies’ appeals on penalties should be reheard by the CAT.

“(This was) not because (the Court of Appeal) accepted the firms’ arguments but because it found that the CAT had not properly addressed them,” the CMA said.

Its executive director for competition enforcement Juliette Enser said the Court of Appeal’s ruling “should send a clear message that we will not tolerate businesses ripping off the NHS”.

“After many years of fighting this case in the courts, this ruling shows once again we were right to take action against firms exploiting the NHS by charging excessive and unfair prices for a lifesaving medicine relied on by thousands of patients,” she said.

“We will continue this fight and come down on any business breaking the law.”