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The competition regulator’s attempts to disqualify pharmaceutical company directors is considered by Nicola Sharp, of financial crime and regulatory specialists Rahman Ravelli

Author: Nicola Sharp  13 September 2022

Posted in : Competition & Cartels .

The Competition and Markets Authority (CMA) is seeking to disqualify seven directors of four companies for collusion after certain prescription drug prices rose by 700%.

Alliance Pharma PLC, Advanz Pharma Corp, Lexon (UK) Ltd and Medreich PLC were fined a combined total of £35 million by the CMA earlier this year. The regulator found that the companies conspired in the supply of anti-nausea drugs and increased the prices from £6.49 per package to £51.68 between 2013 and 2017.

The CMA is now going to the High Court to implement competition disqualification orders against seven directors, after concluding that they were personally involved in the collusion. According to the competition watchdog, the directors were involved in a conspiracy to reduce competition in the supply of dissolvable prochlorperazine in the UK and then increase its price. The drug is used to treat nausea, dizziness and migraines.

In this case, it was found that the NHS spent around £7.5 million on prochlorperazine packages in May 2019, an increase from £2.7 million. Yet fewer medication packages were distributed.

Over recent years, the NHS has experienced stresses and strains as a result of the pandemic, funding and staff shortages. The CMA is now taking action against those who have contributed to this strain within the pharmaceutical sector, which is a positive step.

Having achieved the issuing of severe fines to these companies, it will be interesting to see whether the applications to the High Court for disqualification of the directors will be just as successful.

For information relating to enforcement, cartels, competition and the CMA, you can read the guide: Cartels And Competition: The Law, Its Enforcement And The Need For Advice.

 

 

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Nicola Sharp

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Nicola is known for her fraud, civil recovery, arbitration and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.

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