Regulator wins decade-long pricing tussle with Pfizer
The UK competition watchdog has won permission to appeal in a case against US pharmaceutical giant Pfizer after a long-running legal battle over allegations of excessive pricing, overturning a previous decision by the Tribunal.
The court said the Competition Appeal Tribunal (CAT), was “wrong to set aside the [Competition and Market’s Authority’s] decision” in relation to it’s investigation into the company’s pricing of an anti-epilepsy drug.
The decision follows a 10-year legal battle between the regulator and the drugmaker – which developed one of the covid vaccines in 2020 – over allegations it had broken UK competition law by charging the NHS excessively for the drug, phenytoin sodium, which is used to treat epilepsy.
“The CAT found errors in the [CMA’s] Decision which, on a fair reading, the CMA did not make,” the court said in its judgment.
It added that “the CAT failed to engage with, or mischaracterised, the CMA’s decision on critical issues” and rejected the CAT’s claims that the CMA had “examined the evidence in a biased and selective way.”
The court will now consider further submissions from the parties before deciding whether to reinstate the CMA’s decision, including fines.
Juliette Enser, executive director of competition enforcement at the CMA, said this is “an important judgment” as the drug is “vital” and “relied on by thousands to prevent life-threatening seizures, and the CMA found that these companies exploited their positions to charge the NHS excessive prices.”
“The judgment confirms the Competition Appeal Tribunal was wrong to set aside the CMA’s decision – recognising that our findings were based on a fair and robust assessment of the evidence. We will now make submissions to the Court in advance of its further ruling,” Enser said.
NHS spending hiked 27 times
The investigation was originally opened in 2013 over the suspected pricing issues.
The CMA issued a statement against Pfizer and the company’s UK distributor, Flynn Pharma, in 2015, claiming they were abusing their market position by selling the drug to customers, including the NHS, at prices up to 27 times higher than those traditionally charged by Pfizer.
Pfizer sold its UK distribution rights for the medication to Flynn Pharma in September 2012, which began selling its own unbranded version, which Pfizer continued to manufacture, but sold it to Flynn at prices up to 17 times higher than Pfizer’s historic prices.
Prior to 2012, the NHS spent approximately £2.3m on the drug annually, but in 2013 this soared to over £50m, and to over £40m in 2014.
Appeal after appeal
In 2016 the CMA fined Pfizer £84.2m and Flynn Pharma, £5.2m, and ordered them to lower their prices.
Both companies appealed the decision to the CAT in June 2018, which sent it back to the CMA after ruling that the regulator had failed to properly evaluate the prices of similar products, a decision they appealed in 2020.
The Court of Appeal upheld the tribunal’s decision that the CMA had not considered the wider market in its decision, and in August 2021, the regulator reopened the investigation, noting that both companies had “exploited a loophole by de-branding the drug”, leading to the NHS having “no choice” but to pay new prices that were increased “overnight”.
The regulator then issued revised fines to both companies in 2022: £63.3m for Pfizer and £6.7m for Flynn. Both companies appealed in 2024, and the CAT ruled in their favour.
The judgment follows Pfizer and Flynn appealing against the fines in March 2025 and challenging the CAT’s decision to re-evaluate the ruling, which was heard in January this year.