Competition watchdog refuses to investigate potential pharma collusion
The UK’s Competition and Markets Authority (CMA) has responded to a call for them to investigate anti-competitive collusion between pharmaceutical companies for conditioning their investment in the UK on the prices the NHS pays for medicines. The UK’s anti-trust authority said it had not seen any direct evidence of collusion, nor that this could be inferred by the timing of the announcements by the pharmaceutical companies. They are not taking any further action. The three organisations that called for the investigation (Balanced Economy Project, Global Justice Now and Just Treatment) said in response:
We are extremely disappointed by the UK’s anti-trust regulatory body’s response and we are very concerned about the implications of their decision for oversight of anti-competitive practices in the UK.
In short, they’re saying if there is a secret agreement then we don’t know about it and therefore can’t investigate it. Businesses of this size don’t make knee jerk market reactions in such a short space of time - there is a long lead time for consideration for these types of huge investments. The fact that the announcements from these companies happened within a very short window is, to anyone who understands business, a clear signal of some sort of potentially anti-competitive coordination.
The CMA response shows a complete misunderstanding of strategic business decision making. It is another example of the CMA appearing to be out of its depth when it has to deal with powerful firms, particularly in this political climate.
It is particularly telling that the CMA’s decision comes at the very point industry is briefing journalists about an impending offer from the UK government to dramatically increase NHS spending on medicines, with celebratory quotes that say the pharmaceutical industry “have kicked up enough of a stink and they [the UK government] have given in. This is the price you have to pay post-Trump for global pharma to continue to play in the U.K.”
We’re concerned that the CMA’s lack of appetite for taking on monopolies like big pharma is down to the government’s insistence on regulators prioritising a “growth” agenda. This case shows the chilling effect it has on regulators, and that it prioritises the type of growth that delivers high profits to monopoly-wielding firms able to hold us to ransom like big pharma are doing, at huge cost to UK taxpayers and people’s health.
We encourage leaks, or whistleblowers to come forward. It’s the only course of action left. The CMA has a reward programme for whistleblowers alongside a leniency programme to incentivise self-reporting by those involved in cartels.