The Competition and Markets Authority (CMA) are currently embroiled in a lot of investigations over the pricing of medicines, and it’s been something of a hot topic for quite some time. In 2014, two pharmaceutical companies were fined for breaching competition laws by entering into a cartel to reduce the competition of supplying medicines to care homes.<\/p>\n
Lloyds’ Pharmacy and Tomms Pharmacy were the two companies involved in the cartel between May and November 2011, and they were justifiably investigated and fined as a result of their activities.
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\nLloyds Pharmacy is a community pharmacy with thousands of stores across the UK that dispenses prescription drugs and other medicines. Tomms Pharmacy is part of the Quantum Pharma Group founded in 2004; a niche pharmaceutical developer that supplies to pharmacies, hospitals, and the care home market.<\/p>\n
Unfortunately, they ended up forming an illegal cartel that landed them in serious trouble.<\/strong><\/p>\n Fines totalling over \u00a3370,000 were issued as a result of anti-competitive behaviour the two pharmacies engaged in. The two pharmacies agreed to not target each other’s existing care home customers with the aim to reduce competition. This is a flagrant breach of competition laws, and serves only to potentially force prices up and keep consumer choice down.<\/p>\n The agreement was that Tomms would not seek to supply Lloyds’ customers if Lloyds did not try to supply to Tomms’ customers – at least for a period of time. Lloyds’ eventually alerted the Office of Fair Trading (who preceded the CMA) about the cartel between the two companies, and investigations in to the activities commenced.<\/p>\n The outcome was that Hamsard, which is incidentally the parent company of Lloyds and Tomms, was fined over \u00a3370,000.<\/p>\n The original figure was \u00a3646,426, but the Office of Fair Trading enacted a leniency policy that the CMA themselves have today. Their policy is that they will allow partial or full immunity to companies that are involved in the anti-competitive behaviour if they come forward and inform them of any breaches. Due to Hamsards admitting to taking part in anti-competitive behaviour and agreeing to cooperate with the Office of Fair Trading, the original figure was reduced to \u00a3370,000.<\/p>\nWhat was the outcome?<\/h2>\n