Pharmaceuticals: anti-competitive agreements

The CMA has completed its investigation into anti-competitive agreements in the pharmaceutical sector under Chapter I CA98 (case reference: 50511-2).

From:
Competition and Markets Authority
Published
12 July 2018
Last updated
7 February 2023 — See all updates
Case type:
CA98 and civil cartels
Case state:
Open
Market sector:
Pharmaceuticals
Opened:
10 October 2017

Case timetable

Date Action
5 June to 4 August 2023 Appeal and the competition law issue of the director disqualification proceedings to be heard before the Competition Appeal Tribunal between 5 and 27 June and 27 July and 4 August
7 February 2023 Publication of non-confidential infringement decision
14 November 2022 Competition Appeal Tribunal made case management orders regarding the transferred aspect of the disqualification, listing it alongside the main appeal proceedings
18 October 2022 High Court made an order transferring the consideration of competition condition of the director disqualification proceeding to the Competition Appeal Tribunal
2 September 2022 CMA issued proceedings in the High Court of Justice seeking the disqualification of 7 company directors
April 2022 Lexon, Alliance, Cinven and Advanz filed appeals in the Competition Appeal Tribunal against the CMA’s findings in the Infringement Decision. The CMA will defend the appeals. The final addressee of the Infringement Decision, Medreich, has not appealed the findings and has paid its fine
3 February 2022 Infringement Decision Issued: anti-competitive agreement
Q1 2022 (estimate) Final decision on case outcome
22 January 2021 Decision on administrative priorities grounds to close investigation of whether alleged separate agreements between each of (1) Alliance Pharmaceuticals and Focus and (2) between Focus, Lexon and Medreich in themselves individually broke competition law, while continuing investigation of alleged overarching agreement between Alliance Pharmaceuticals, Focus, Lexon and Medreich.
1 January 2021 Following the end of the EU Exit Transition Period on 31 December 2020, the CMA’s investigation continues on the basis of the Chapter I prohibition in the Competition Act 1998 only (see CMA Guidance on the functions of the CMA after the end of the Transition Period)
20 July 2020 to Spring 2021 (estimate) Considering written and oral representations on the Statement of Objections and further evidence gathering and analysis
7 April to 20 July 2020 Case paused in order to reallocate resources to ensure that the CMA is able to focus on urgent work during the Coronavirus (COVID-19) pandemic
November 2019 to 7 April 2020 Considering written and oral representations on the Statement of Objections and further evidence gathering and analysis
August 2019 to October 2019 Receipt of written and oral representations on the Statement of Objections
May 2019 Statement of objections issued
Q2 2019 (estimate) Decision on whether to issue a statement of objections for certain alleged anti-competitive agreements and/or concerted practices and certain parties
July 2018 to Q1 2019 Further investigation including further information gathering in relation to certain alleged anti-competitive agreements and/or concerted practices and certain parties. CMA analysis and review of information gathered
October 2017 to June 2018 Initial investigation and information gathering. CMA analysis and review of information gathered
October 2017 Investigation opened

Change log

The following changes have been made to the case timetable since it was first published:

Date of change Reason for change Change made to timetable
17 November 2021 Additional time needed to consider parties’ responses to the Statement of Objections Date for CMA final decision on case outcome changed to Q1 2022
23 June 2021 Additional time needed to consider parties’ responses to the Statement of Objections Date for CMA final decision on case outcome changed to Autumn 2021
20 July 2020 Case resumed Date for CMA final decision on case outcome changed to Spring 2021
7 April 2020 Case paused in order to reallocate resources to ensure that the CMA is able to focus on urgent work during the Coronavirus (COVID-19) pandemic Timetable paused
28 March 2019 Additional time needed to analyse information Date for CMA decision on whether to issue a statement of objections changed from Q1 2019 to Q2 2019.

Court proceedings seeking director disqualification

Update 17 November 2022

17 November 2022: In September 2022, the CMA issued proceedings in the High Court of Justice, Business and Property Courts seeking the disqualification of 7 directors.

On 18 October 2022, the High Court made an order transferring the competition law issue in these proceedings (namely, whether the directors’ companies committed a breach of competition law) to the Competition Appeal Tribunal. The transfer was made so this could be heard and determined alongside the related appeals brought by Lexon, Alliance, Cinven, and Advanz, against the CMA’s infringement decision and the penalty imposed. The High Court will wait for the decision of the Competition Appeal Tribunal before progressing the CMA’s disqualification case further.

At a case management conference on 14 November 2022, the Competition Appeal Tribunal made case management orders addressing the transferred aspect of the disqualification proceeding. This order will enable the transferred aspect of the disqualification proceeding to be considered by the Tribunal at the same time as the appeals.

Update 2 September 2022

2 September 2022: The Competition and Markets Authority (CMA) has issued proceedings in the High Court of Justice, Business and Property Courts seeking the disqualification of the following company directors:

  1. Pritesh Sonpal, a director of Lexon UK Holdings Ltd. from 21 February 2018 to 9 April 2021 and Lexon (UK) Ltd. from 14 December 2000 and 9 April 2021

  2. Peter Butterfield, a director of Alliance Pharmaceuticals Ltd. and Alliance Pharma plc from 22 February 2010 to date

  3. John Dawson, a director of Alliance Pharmaceuticals Ltd. from 16 September 1996 to 30 April 2018 and Alliance Pharma plc from 23 December 2003 and 30 June 2019

  4. Mark Cresswell, a director of Focus Pharmaceuticals Ltd. from 28 October 2002 to 1 October 2014 and Focus Pharma Holdings Ltd. from 19 October 2007 to 1 October 2014

  5. Roland Brown, a director of Focus Pharmaceuticals Ltd. from 28 October 2002 to 1 October 2014 and Focus Pharma Holdings Ltd. from 19 October 2007 to 1 October 2014

  6. Graeme Duncan, a director of Focus Pharmaceuticals Ltd., Focus Pharma Holdings Ltd., Mercury Pharma Group Ltd., and Concordia Investment Holdings (UK) Ltd. from 31 December 2016 to 8 March 2018 and from 30 November 2018 to 12 January 2022

  7. Debangshu Dey, a director of Medreich plc from 1 April 2016 to 31 August 2017

The proceedings arise from the CMA’s decision dated 3 February 2022 that between June 2013 and July 2018, Alliance Pharmaceuticals, Focus (now owned by Advanz, previously owned by the private equity firm Cinven), and Lexon were involved in an arrangement that that had the object of restricting competition in the supply of prochlorperazine 3mg dissolvable or “buccal” prescription-only medicine to the NHS. Another company (Medreich) was involved in the arrangement between February 2014 and February 2018.

Lexon, Alliance, Cinven, and Advanz have each filed an appeal in the Competition Appeal Tribunal (CAT) against CMA’s decision and the penalty imposed.

The CMA will issue these proceedings under section 9A of the Company Directors Disqualification Act 1986 following an investigation into the directors’ conduct in relation to the breach of competition law which is the subject of the above mentioned appeal. It is now for the High Court to decide whether to make a disqualification order against each of the directors

Notices of appeal

April 2022: Lexon, Alliance, Cinven and Advanz filed appeals in the Competition Appeal Tribunal against the CMA’s findings in the Infringement Decision. The CMA will defend the appeals.

The final addressee of the Infringement Decision, Medreich, has not appealed the findings and has paid its fine of £4.62 million.

Infringement decision

3 February 2022: The CMA has found a competition law breach in relation to the supply of prescription-only Prochlorperazine 3mg dissolvable or “buccal” tablets to the NHS.

Administrative priorities decision

22 January 2021: The CMA has decided to close on administrative priorities grounds its investigation of whether alleged separate agreements between each of (1) Alliance Pharmaceuticals and Focus and (2) Focus, Lexon and Medreich in relation to the supply of prochlorperazine 3mg buccal tablets in the UK in themselves individually broke competition law. The CMA is continuing its investigation of whether an alleged overarching agreement between Alliance Pharmaceuticals, Focus, Lexon and Medreich in relation to the supply of prochlorperazine 3mg buccal tablets in the UK broke competition law.

Statement of objections

23 May 2019: The CMA issued a statement of objections alleging that Focus Pharmaceuticals, Medreich, Alliance Pharmaceuticals and Lexon have breached UK and EU competition law by entering into anti-competitive agreements in relation to the supply of prochlorperazine 3mg buccal tablets in the UK.

Notes

  • The investigation is under Chapter I of the Competition Act 1998 (CA98).

  • No conclusion should be drawn that there has been an infringement of competition law at this stage and the recipients of the Statement of Objections will now have the opportunity to respond to the allegations.

  • The CMA will consider any representations it receives before any decision is taken as to whether competition law has in fact been infringed.

  • Changes to the timing of original entries in the case timetable will be made where the estimated timing changes.

Case information

On 10 October 2017, the CMA launched an investigation under Chapter 1 of the CA98 and Article 101 of the TFEU into suspected breaches of competition law by various parties. The investigation relates to alleged anti-competitive agreements and/or concerted practices in relation to generic pharmaceutical products.

Following the end of the EU Exit Transition Period on 31 December 2020, EU law is no longer being applied in the UK and the CMA will only investigate suspected infringements of UK domestic competition law in relation to conduct from both before and after 31 December 2020.The CMA’s investigation in this case since the end of the Transition Period therefore continues on the basis of the Chapter I prohibition in the Competition Act 1998 only.

Contacts

Published 12 July 2018
Last updated 7 February 2023 + show all updates

  1. Decision published.

  2. Update on court proceedings published.

  3. Court proceedings seeking director disqualification published.

  4. Timetable updated.

  5. Infringement decision announced.

  6. Date for the final decision on the case outcome changed to Autumn 2021 from Spring 2021.

  7. Administrative priorities decision announced.

  8. Case timetable and change log updated.

  9. Case paused and timetable updated.

  10. Entries added to the case timetable.

  11. The CMA has issued a statement of objections.

  12. Date for CMA decision on whether to issue a statement of objections changed from Q1 2019 to Q2 2019.

  13. First published.

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