Four pharmaceutical firms have been accused of illegally colluding to restrict the supply of an anti-nausea tablet, driving the price paid for it by the NHS up by 700%.
The Competition and Markets Authority (CMA) said the cost of Prochlorperazine rose from £6.49 per pack to £51.68, after suppliers agreed not to compete.
The drug is often prescribed to cancer patients undergoing chemotherapy.
One of the firms named, Alliance, denied the allegations.
In a statement of objections, the CMA says that between 2013 and 2018, the annual cost of 3mg dissolvable Prochlorperazine tablets increased from approximately £2.7m to £7.5m, even though the NHS dispensed fewer packs during that period.
It claimed that sharp increase was the result of four companies – Alliance, Focus, Lexon and Medreich – agreeing not to compete against each other for the supply of the prescription-only pills.
Alliance supplied Prochlorperazine exclusively to Focus, which the CMA says then paid Lexon a share of its profits from the sales.
Lexon, the competition regulator alleges, then shared these payments with Medreich.
The CMA alleges that, before entering into this arrangement, Lexon and Medreich had been planning to launch their own jointly-developed Prochlorperazine.
In a statement, Alliance said it had “no involvement in the pricing or distribution of Prochlorperazine since 2013, when it was out-licensed by the company to Focus Pharmaceuticals Limited on an exclusive basis as is normal market practice”.
The firm added: “Alliance has not had control of or influence on, and nor has it benefited from, any price increases.”
The BBC has contacted Focus, Lexon and Medreich for comment.
The CMA’s Ann Pope said: “Agreements where a company pays a rival not to enter the market can lead to higher prices and deprive the NHS of huge savings that often result from competition between drug suppliers.
“The NHS should not be denied the opportunity of benefitting from an increased choice of suppliers, or lower prices, for important medicine.”
The companies concerned will now have the opportunity to respond to the CMA’s provisional findings.
If it eventually determines that competition law has been broken, the CMA can impose a financial penalty of up to 10% of each company’s worldwide turnover.