Napp Pharmaceuticals fined by UK OFT

Napp Pharmaceuticals of the UK has been hit by a fine of L3.2 million($4.5 million) by the country's Office of Fair Trading "for abusing a dominant market position." This is the first financial penalty to be set by the OFT under competition law.

Napp was found to have supplied MST (sustained-release morphine) to doctors at excessively high prices while supplying hospitals at discount levels that blocked competitors. John Vickers, the UK's Director General of Fair Trading, said that discounts of "well over 90%" were offered in tendering for hospital contracts where Napp faced a rival, and at least one competitor was forced to withdraw from the market."

By keeping more than 90% of the hospital segment of the market, Napp was able to retain a similarly high share of the larger business of supplying the drug to patients in the community, said Mr Vickers. It could do this because "prescriptions are strongly influenced by the brands used in hospitals," he claimed, adding that the OFT will seek to force the Cambridge-based firm to cut its community-based prices.