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Teva to defend its Actavis UK division amid claims of “unfair” price hike

The UK’s competition watchdog said the business may have broken competition laws after it hiked the price of a drug
red and white pills
Hydrocortisone is used to treat Addison's disease

Drug firm Actavis UK has been accused of charging “excessive and unfair prices” after the firm ramped up the cost of a lifesaving drug by more than 12,000%.

The Competition and Markets Authority (CMA) said Actavis had ripped off the NHS after it increased the cost of 10mg hydrocortisone tablets from 70p to £88 over the course of eight years.

This means that between 2009 and 2015, the NHS’s annual spend on the drug – which is used to treat Addison’s disease – rose from £522,000 to £70mln.

“This is a life-saving drug relied on by thousands of patients, which the NHS has no choice but to continue purchasing,” said the CMA’s senior responsible officer Andrew Groves.

“We allege that the company has taken advantage of this situation and the removal of the drug from price regulation, leaving the NHS - and ultimately the taxpayer - footing the bill for the substantial price rises.”

Groves did add that the findings from the investigation are provisional and that no conclusion could be drawn that the firm had broken competition law.

Actavis UK’s current owner Teva Pharmaceutical Industries (NYSE:TEVA) has said it will defend the allegations.

Teva recently acquired the division as part of its deal to buy Actavis Generics from US drug giant Allergan (NYSE:AGN).

The move from the CMA is part of a wider crackdown on pharmaceutical firms which deal with the NHS.

Earlier this month, Pfizer (NYSE:PFI) was fined a record £84.2mln by the watchdog after it was adjudged to have overcharged the NHS after hiking the price of an epilepsy drug by 2,600% overnight.

Shares were down 18c to US$36.55 in early deals on Friday.

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