Canadian drug company Concordia International has overcharged Britain’s national health provider by more than 100 million pounds over the last decade for the sale of a life-altering thyroid drug, according to the country’s competition watchdog.
In 2016, the National Health Service was slapped with a 34 million pound bill (CAD$57.5 million) for the purchase of liothyronine, which is used to treat patients with an underactive thyroid condition called hypothyroidism. In a move reminiscent of the price-gouging tactics of the now-imprisoned “Pharma Bro” Martin Shkreli, Concordia raised the price of liothyronine from £4.46 per pack in 2007, to £258.19 in 2017, a 6000 percent increase.
That effectively meant that the NHS went from paying roughly 600,000 pounds in 2007, to tens of millions of pounds, while production costs of the drug remained “broadly stable”, read a statement from the Competition and Markets Authority.
Concordia has had a monopoly over the supply of liothyronine pills in the U.K. for over a decade, a very lucrative monopoly indeed, considering that hypothyroidism affects at least two in every 100 people. But in the the summer of this year, British pharma company Morningside Healthcare and Israel’s Teva Pharmaceuticals were granted licenses to supply the same drug.
“We allege that Concordia used its market dominance in the supply of liothyronine tablets to overcharge the NHS by millions of dollars,” said Andrea Coscelli, Chief Executive of the Competition and Markets Authority.
Concordia is refuting the CMA’s allegation, saying that the pricing of liothyronine was conducted “openly and transparently” with the Department of Health in the U.K. over a period of 10 years.”
“We do not believe that competition law was infringed,” Concordia added in a statement.
But extraordinary price hikes seem to be Concordia’s modus operandi. In May 2016, the company hiked the price of eye-drops for bacterial conjunctivitis by 5700 percent in the U.K., where it had sole distribution rights.
When Concordia bought Amdipharm Mercury group (AMCo) from private equity group Cinven in September 2015, it hiked the price of drugs that AMCo owned — fusidic eyedrops for instance, went from just over 2 pounds in May 2013 to almost 30 pounds in April 2016.
Concordia has also increased drug prices in the U.S. Two blood pressure drugs, Dibenzyline and Dyrenium increased by 174 percent and 152 percent respectively in the span of a year.
The Ontario-based company’s aggressive expansion model of acquiring smaller pharma companies and then rapidly hiking the price of their drugs to generate impressive revenues caught the attention of Wall Street short sellers last summer, who were less-than-enthused by the sustainability of this model.
Between May 2016 and December 2016, Concordia’s stock plunged from $42 per share, to just over $3 — the company’s stock never recovered and is now worth a mere $0.59.