Drug firms accused of illegal market sharing in supply of antibiotic

Two pharmaceutical companies have been accused of breaching competition law in relation to the antibiotic Nitrofurantoin by the Competition and Markets Authority (CMA).

AMCo (now Advanz) and Morningside are alleged to have entered into an agreement which would have kept prices of Nitrofurantoin artificially high.

It’s believed that AMCo and Morningside entered into an agreement during 2014-2017 with wholesaler Alliance Healthcare. Allegedly, AMCo and Morningside agreed to sell equal volumes of Nitrofurantoin to Alliance Healthcare to avoid competing with each other. More so, during 2015 and 2016, both companies agreed to supply the drug exclusively to Alliance Healthcare.

Nitrofurantoin, which is commonly used to treat urinary tract infections, was solely supplied in the UK by AMCo until Morningside entered the market in 2014.

The CMA has also provisionally found that AMCo disclosed sensitive pricing information to Morningside in 2014 to reduce competition between them.

The CMA have issued a Statement of Objections to both companies that considers their business practices to have prevented or restricted competition. Specifically, the CMA alleges that when Morningside started supplying Nitrofurantoin, the price falls that usually occur when a new competitor enters the market did not happen.

The CMA’s Statement of Objections is only a provisional decision and both companies will have the opportunity to represent themselves before a final decision is made.

Ann Pope, the CMA’s senior director of Antitrust, said: “Drug companies that break competition law risk forcing the NHS, and UK taxpayers, to pay over the odds for important medical treatments.

“We've provisionally found that suppliers of this important antibiotic entered into arrangements with the aim of keeping Nitrofurantoin capsule prices artificially high, meaning the NHS wouldn't benefit from the lower prices that come from effective competition."