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CMA fines Advanz and investors for more than £100 million (approximately US$139 million) after the company increased the price of thyroid tablet packs from £20 (US$23.74) in 2009 to £248 (approximately US$295) in 2017.
After an investigation, the UK’s Competition and Markets Authority (CMA) found that Advanz charged “excessive and unfair prices” for supplying liothyronine tablets (thyroid hormone deficiency treatment) from 2009–2017, according to a July 29, 2021 press release.
Despite having generics, liothyronine tablets had limited or no competition. Advanz was able to sustain repeated price increases of more than 6000%, which began in 2007.
In 2006, the National Health Service (NHS) spending on the tablets was £600,000 (approximately US$712,000), which was one year before the price increase strategy. By 2009 (after the price increase), NHS spending jumped to more than £2.3 million (approximately US$2.7 million) and then jumped again to more than £30 million (approximately US$35.6 million) by 2016.
The volumes of liothyronine tablets remained broadly stable, and the cost of producing tablets didn’t increase significantly. Therefore, the CMA concluded the price increases were not driven by meaningful innovation or investment.
The firms involved have been fined more than £100 million (approximately US$139 million) by the CMA:
HgCapital and Cinven are two private equity firms that were previous owners of the businesses forming part of Advanz.
“Advanz’s decision to ratchet up the price of liothyronine tablets and impose excessive and unfair prices for over eight years came at a huge cost to the NHS, and ultimately to UK taxpayers,” said Andrea Coscelli, chief executive of the CMA, in a press release. “Advanz’s strategy exploited a loophole enabling it to reap much higher profits. This fine of over £100 million, and our work in the pharma sector to date, sends a clear message that breaking the law has serious consequences.”