In the News

Anti-competitive behaviour - UK drug companies fined £260m for inflating prices for NHS

Graham Watson

15th July 2021

The Competition and Markets Authority (CMA) has fined a UK drug company £260m for inflating the price of hydrocortisone tablets for a decade.

Accord-UK, which was made up of Auden Mckenzie and Actavis UK, were able to increase the price of a 10mg packet of tablets from 70p in April 2008 to £88 by March 2016 using a variety of tactics, not least paying potential rivals not to enter the market.

As a result, the NHS was forced to pay higher prices for the drug.

The head of the CMA is quoted as saying:

“These are without doubt among the most serious breaches we have uncovered in recent years. Our fine serves as a warning to any other drug firm planning to exploit the NHS.”

I pose a simple question: why isn't this a criminal case?

Hasn't the company defrauded the taxpayer of millions of pounds? And haven't the executives of the company been well-rewarded for doing so? It seems that fines are just another cost of doing business as directors seek higher profits, remuneration and dividends

Horizontal and Vertical Collusion Explained I A Level and IB Economics

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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