Pharma group bosses face being struck off after watchdog ruling
2 September 2022, 12:04
The Competition and Markets Authority said it had issued proceedings in the High Court to disqualify directors across four pharma groups.
Pharmaceutical firms have appealed against the competition watchdog’s move to strike off seven bosses for misconduct.
The Competition and Markets Authority (CMA) said on Friday that it had issued proceedings in the High Court to disqualify directors at four groups, including the chief executive of international healthcare group Alliance Pharma.
It follows an investigation into alleged breaches of the law in the UK’s pharmaceutical sector, launched in October 2017 by the CMA.
Earlier this year, the watchdog fined five firms more than £35 million for colluding to restrict the supply of an anti-nausea tablet that sent costs to the NHS soaring by 700%.
Seven directors at Alliance Pharma, Lexon, Medreich and Focus – owned by Advanz and previously by private equity firm Cinven – could face being disqualified from their positions as a result of proceedings.
But Alliance, Lexon, Advanz and Cinven have each filed appeals at the Competition Appeal Tribunal against the CMA’s decision, which could prevent the disqualification order being heard by the High Court.
Alliance Pharma, which was fined £7.9 million as part of the penalties imposed in February, said on Friday that it is “very disappointed, in light of the facts”, with the watchdog’s decision to take legal action against its chief executive Peter Butterfield.
“The board disagrees and is disappointed with the CMA’s actions against Peter,” said David Cook, chairman of Alliance Pharma.
“Peter has been on the board since 2010 and was appointed CEO in May 2018.
“He has been instrumental in helping Alliance to deliver on its growth plans and successfully drive the business forward. He has our full support.”
The group added that it “fundamentally disagrees” with the CMA’s actions, claiming it did not participate in, or profit from, any market-sharing arrangement.
This alludes to the CMA’s earlier findings that the firms had struck an illegal arrangement over the supply of Prochlorperazine – an important treatment for nausea, dizziness and migraines.
The investigation concluded that the companies colluded to ensure a competitor was paid not to launch a product, which enabled prices of the existing drug to surge, costing the NHS millions.
It is in the hands of the High Court to decide whether to make a disqualification order against each of the directors, the CMA said.
Alliance Pharma said a date for the appeal has not been set but it is expected some time in mid-2023.
