A drug company has been accused of ripping off the NHS after increasing the price of life-saving steroid tablets from 70p to £88 a packet.
Auden Mckenzie, now part of Actavis UK, raised the price of hydrocortisone tablets by 12,500 per cent between 2008 and 2015, costing the NHS an extra £70 million.
Yesterday the Competitions and Markets Authority said it had provisionally found that the company had broken competition law by charging excessive prices for two strengths of the tablets after dropping an existing brand name in order to circumvent a profit cap.
Auden Mckenzie is one of several pharmaceutical companies exposed by a Times investigation into price increases which has led to a separate wide-ranging CMA inquiry.
Emails obtained by this newspaper show that NHS officials waved through price rises for hydrocortisone as recently as 2014 and 2015.
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In July 2015, an official at the NHS Business Services Authority, a Department of Health quango, sought confirmation that the prices for 10mg and 20mg packets were rising from £60 to £77 and £65 to £85 respectively.
The official made no attempt to seek an explanation or justification for the increases and accepted Auden Mckenzie’s brief reply: “These prices are correct.”
On another occasion, in January 2014, an NHS BSA official sought confirmation of an earlier price rise for the same drug without challenging it.
The emails show NHS officials failing to question increases in the price of other Auden Mckenzie drugs, including on one occasion in March 2014 when prices for a generic drug used to treat cancer rose twice in nine days.
An NHS official wrote: “Am I right in thinking that you are changing the price for dexamethasone 2mg tablets 50 pack (£35.25) and 100 pack (£69.50) effective 1st and 2nd April 2014 then changing the prices again effective 9th April 2014 to the above prices [£39.50 and £78].”
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Auden replied saying it had checked with the “pricing team” and this was correct. The change was then made to the price the NHS paid for the drug.
Andrew Groves of the CMA said hydrocortisone was a “lifesaving drug relied on by thousands of patients, which the NHS has no choice but to continue purchasing”.
Auden acquired the licences for the off-patent drug from Merck Sharp & Dohme in 2008 and, after dropping the brand name, increased prices from 70p for 10mg packs to £87.85 in March this year; 20mg tablets rose from £1.07 to £102.74 over the same period.
The price rises meant the drug cost the NHS £70 million in 2015 compared with £528,000 a year previously.
Auden Mckenzie was founded by Amit and Meeta Patel, who are brother and sister, and sold to Actavis in January last year for £306 million. The company’s generics business was subsequently sold on to Teva in a $40.5 billion deal announced later that year. The Patels are not personally the subject of the CMA inquiry.
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In 2010 Mr Patel responded to criticism over the price of hydrocortisone tablets by claiming that price rises had been justified by the need to invest in a new manufacturing plant and claimed that they would now fall. However, the price subsequently rose from £44.40 a packet to £87.85.