by Thomas Meek
LONDON, Dec 8 (APM) - Pfizer has come under fire from the British Generic Manufacturers Association (BGMA) for its "cynical behaviour" to artificially increase the price of generic drugs that lack competition.
Warwick Smith, director general of the trade body, said in a Wednesday statement: "Pfizer's cynical behaviour flies in the face of the virtuous circle between innovator and generic companies which normally works extremely well in the interests of patients and the National Health Service (NHS)."
The UK's Competition and Markets Authority (CMA) on Wednesday imposed a record fine of 84.2 million pounds on Pfizer for charging excessive prices to the NHS for epilepsy drug phenytoin sodium capsules (APMMA 50774).
The fines follow prices increasing by up to 2,600% overnight after the drug was deliberately de-branded in September 2012.
Prior to September 2012, Pfizer manufactured and sold phenytoin sodium capsules to UK wholesalers and pharmacies under the brand name Epanutin and the prices of the drug were regulated under the PPRS scheme. In September 2012, Pfizer sold the UK distribution rights for Epanutin to Flynn Pharma, which de-branded (or genericised) the drug, meaning that it was no longer subject to price regulation.
In an interview on Thursday with APM, Smith said it was important to note that what happened with Pfizer was not typical of the industry.
Referencing an investigation by The Times earlier this year that uncovered more situations similar to the one Pfizer was fined for, Smith said: "We are talking about fewer than 2% of products on the market, so it's very much a fringe activity, but clearly the CMA has found something it doesn't like in this particular case.
"It's not part of our role to artificially increase prices. Our role is to reduce prices."
He added that it also needs to be understood that sometimes, particularly with older products, generic companies need to make an investment to bring them up to modern standards that will result in price rises.
"But we just need a system to ensure when that happens it is for a good reason and people aren't hiding behind artificial prices."
Smith said that artificial price increases for generic drugs without competition have been allowed to happen in the UK as the Department of Health did not have the power to enforce an arrangement with generic drugmakers to intervene and set prices when competition does not work.
In order to address this, health secretary Jeremy Hunt introduce the Health Service Medical Supplies (Costs) Bill, which this week passed through the House of Commons (APMMA 50796).
Smith said this will "block the loophole" that was exploited by Pfizer and Flynn.
"What we are aiming for is to almost get to where we thought we were - to have a system whereby prices can be monitored but there are some criteria so companies and the government and the NHS will know whether particular prices rises will be deemed to be reasonable or not.
"And if they're not reasonable then there could be a discussion to see whether there is a good reason for the price increase or there isn't."
He added that the advantage of this sort of system is that an agreement on price can be reached in weeks or months rather than years.
Smith said that the BGMA is also in discussions with the health department on a potential third system for pricing drugs that would apply to branded generics, or generic products that have a monopoly on the market.
He said that the PPRS scheme works well for branded drugs and the statutory scheme works for commodity generics products, but neither was a good fit for products that did not fall into these categories.
"So we are urging the DH not just to look at monopoly brands and commodity generics but to look at this third area where it's a generic but it doesn't face competition the way that most do, and have a separate system which gives certainty and value and also recognises that these are more complex products."
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