Expert legal advice from The Competition Lawyers

Suspected unfair pricing investigations

First published by Author on October 05, 2022 in the following categories: Consumer Law Industry Investigations Latest Price Fixing Pricing and tagged with | | | | | |

overpriced hydrocortisone tablets

It is important for the CMA to look into incidents of suspected unfair pricing to ensure that consumers are not being overcharged and taken advantage of.

This can particularly be the case in relation to medication costs of which the CMA has looked into a number of issues about the NHS being overcharged, and we will provide an update of an example in this article.

Broadly speaking, it is important that pricing is set at fair levels and that companies are not taking advantage of consumers to drive their profits up in an obscene manner. At the same time, competition must be required to allow pricing to be set competitively as well.

About suspected unfair pricing – CMA investigations

One of the core roles of the Competition and Markets Authority (CMA) is to conduct investigations into suspected unfair pricing in any industry in the UK. It is an important matter to look into because consumers should not be taken advantage of and companies should not collude in respect of pricing to increase their profit margins at our expense.

Whilst profits are a normal part of an economy, suspected unfair pricing needs to be looked into particularly when pricing may be excessive, and the consumers may not be getting the best deals. This could happen where there may be a marginal propensity to pay more for a particular product or service which is something that companies know about and will specifically set prices higher to increase profits. Again, such action may not be against the law, but it comes down to how the market is acting overall. If it is the case that companies are directly or indirectly colluding on price, that is where competition law may be breached.

Recent update: phenytoin sodium capsules

A recent example of a CMA investigation update into suspected unfair pricing involves phenytoin sodium capsules. The actual investigation into this matter has been ongoing since May 2013, and a significant amount of work has been done over the course of the last decade as part of the investigation.

The key update the CMA issued in July 2022 is that the regulator has reportedly found that competition law has been breached in relation to the supply of phenytoin sodium capsules. The CMA has confirmed that fines in the sum of £70 million have been issued as a result of reportedly overcharging the NHS for this important medication.

This is, of course, a major issue as this is our tax money that is essentially paying for this medication. The ruling indicates that more money has been spent on this medication than should have, which directly impacts us all at a time when our NHS needs as much money as possible given consistent under-resourcing in recent years.

Pricing must always be fair

Ultimately, pricing must always be fair which is why it is important for the CMA to investigate any matters of potentially suspected unfair pricing issues. One that they may also need to look at in a great deal more right now is the cost of energy crisis. This is certainly something that needs addressing to prevent people being pushed into fuel poverty, and prevent the huge knock-on effects of inflation and the impact on small businesses.

Whilst plenty of media headlines are reporting that the energy companies are making significant increases in their profits, it seems that the consumers are still being forced into potentially paying far more. The question that needs to be answered is: why?

The content of this post/page was considered accurate at the time of the original posting and/or at the time of any posted revision. The content of this page may, therefore, be out of date. The information contained within this page does not constitute legal advice. Any reliance you place on the information contained within this page is done so at your own risk.
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