A British regulator said on Wednesday, Dec. 7 that it fined pharmaceutical company Pfizer 84.2 million pounds, or about $107 million, for increasing the price of an epilepsy drug by as much as 2,600 percent.

From $3.57 To $85.06

The Competition and Markets Authority said that the New York-based drug company broke competition law for the excessive and unfair pricing of the phenytoin sodium capsules in the United Kingdom in September 2012 after the drug was intentionally debranded.

The CMA said that from $3.57 for 100-milligram packages, the price of the anti-epilepsy drug, which is used by about 48,000 people in the UK to prevent and control medical seizures, increased to $85.06 before it was eventually dropped to $68.05 in May 2014.

Competition Drives Drug Prices Down

Unbranded or generic drugs can be priced freely but competition between suppliers can drive the costs of medications down. CMA said that Pfizer and drug distribution company Flynn Pharma deliberately debranded the drug with the aim of raising the medication's price and this was made possible because there was no competing supplier.

The price increase was partly due to Pfizer, which remained the manufacturer of phenytoin sodium, selling the drug to Flynn Pharma at up to 17 times the drug's original price. Prior to this, Pfizer sold phenytoin sodium capsules directly to wholesalers and pharmacies in the UK under the brand name Epanutin.

Price Hike Ballooned Annual Spending Of The NHS

Because of the price hike, the annual spending of Britain's National Health Service rose from about $2.5 million in 2012 to about $63 million within a year. Epilepsy patients who are already using phenytoin sodium capsules cannot easily switch to alternative medications so the health service had to pay the drug's higher prices.

Philip Marsden, chairman of the Case Decision Group for the CMA's investigation, said in a statement that the two companies deliberately exploited the chance provided by debranding to increase the price of the drug relied upon by many patients. The condition affects about 500,000 people in the UK.

"We are determined to crack down on such behavior and to protect customers, including the NHS, and taxpayers from being exploited,'' said Marsden.

Pfizer To Appeal

Pfizer denied the allegations and said that it would make an appeal.

"In this transaction, and in all of our business operations, we approached this divestment with integrity, and believe it fully complies with established competition law," Pfizer said.

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