Watchdog called in over 'extortionate' drugs pricing claims

Health Secretary Jeremy Hunt has asked the competition watchdog to look at claims that drug companies are exploiting the NHS to raise the price of medicines.

Mr Hunt called in the Competition and Markets Authority (CMA) after an investigation by The Times suggested that prices have been vastly increased through a loophole in NHS rules.

A Health Department spokesman said: "These are serious allegations and no pharmaceutical company should be exploiting the NHS.

"The Secretary of State has asked the CMA to urgently look at the evidence uncovered by The Times as part of their continuing investigations into excessive drugs pricing."

The Times investigation says suppliers are able to introduce "extortionate" price rises by dropping the brand name and taking the medicines outside NHS profit controls.

The Times says the companies face limited competition on long-established, off-patent drugs, which they bought from large pharmaceutical companies.

They allege that wholesalers and their customers also receive a cut and that the prices of 32 drugs have risen by more than 1,000 per cent in the past five years.

The CMA can impose tough financial penalties on a firm which is found to have charged excessive prices. The Health Department can recover losses through the courts.

The Health Department spokesman said the CMA was currently carrying out five investigations relating to suspected anti-competitive practices in the pharmaceutical and healthcare sector.

He said he could not comment on details on the investigations at this stage.