The Canadian pharmaceutical giant Concordia has been accused of using its market dominance to make the UK’s National Health Service pay millions of pounds above market value for its thyroid drug.

Concordia produces liothyronine which is used to treat patients with an underactive thyroid, which can lead to depression, tiredness and weight gain.

Until earlier this year, Concordia was the only supplier of the drug.

Thanks to its market dominance, Concordia upped the price of liothyronine from £4.46 per pack in 2007 to £258.19 in July 2017. This is a price increase of almost 6,000 percent over 10 years, despite production costs remaining stable.

As a result, the UK’s Competition and Markets Authority (CMA) has said that Concordia “abused its dominant position to overcharge the NHS by millions.”

According to the CMA’s investigation, the NHS was spending around £600,000 a year for liothyronine in 2017. This increased to more than £34m by 2017, because of Concordia’s price increase.

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By GlobalData

The CMA’s chief executive, Andrea Coscelli, said:

Pharmaceutical companies which abuse their position and overcharge for drugs are forcing the NHS – and the UK taxpayer – to pay over the odds for important medical treatments. We allege that Concordia used its market dominance in the supply of liothyronine tablets to do exactly that.

At this stage in the investigation, our findings are provisional and there has been no definitive decision that there has been a breach of competition law. We will carefully consider any representations from the companies before deciding whether the law has in fact been broken.

Concordia could be fined up to 10 percent of its annual turnover by the CMA.

Mike Thompson, Chief Executive of the Association of the British Pharmaceutical Industry, said:

“The ABPI does not in any way support or condone any deliberate ‘price hikes’ by pharmaceutical companies. We fully support the CMA in taking action in cases of proven abuse of market power. We also continue to support the Government in taking policy steps to ensure such abuses cannot happen in the future.

“This case is yet to conclude, but we do not – and will not – support any company found to have intentionally exploited the NHS.”

Pharmaceutical companies in deep water over price hikes

Concordia isn’t the only pharmaceutical company charged with upping the price of drugs.

Last year, it was revealed that the pharma company Mylan had hiked the price of its EpiPen, the emergency allergy treatment, from $100 in 2007 to $600 in 2016.

The company was hit with a class-action lawsuit due to the price hikes of the lifesaving devices.

As well, Turing Pharmaceutical’s chief executive, Martin Shkreli, was branded “the most hated man in America” for upping the price of an Aids medication.

Turing acquired the rights to the anti-parasite drug Daraprim, used by Aids patients, and increased the price of the drug by 5000 percent overnight. The cost increased from $13.50 to $750 per dose.

Shkreli was jailed earlier this year after being found guilty on three counts of securities fraud.