Industry Trend Analysis - Liothyronine Investigation Will Further Pressure Concordia's Revenues - FEB 2018

BMI View: This new allegation by the UK ' s Competition and Markets Authority against Concordia will add to the pressure the firm is facing, and highlight that the UK authority is continuing to investigate alleged market abuses in the pharmaceutical industry. Whilst the investigation regarding liothyronine is at a very early stage, it follows on from previous investigations of Concordia in both the UK and the US and comes against a backdrop of falling revenues.

The UK's Competition and Markets Authority (CMA) has provisionally found that Concordia International abused its dominant position to overcharge the National Health Service (NHS) by millions of pounds for a thyroid drug, liothyronine tablets. The CMA opened an investigation into the matter in October 2016, gathering information for the initial, investigation through to April 2017, and deciding to proceed with a formal investigation in May 2017. The CMA has now issued a statement of objections.

Liothyronine tablets are primarily used to treat hypothyroidism, a condition that affects around two in every 100 people and can lead to depression, tiredness and weight gain. Although liothyronine is not the primary treatment for hypothyroidism, for many patients there is no suitable alternative, and until earlier in 2017, Concordia was the only supplier. According to the CMA, in 2016, the NHS spent over GBP34mn (USD45.2mn) on the drug, compared to around GBP600,000 in 2006. The CMA found that the amount the NHS paid per pack rose from around GBP4.46 prior to liothyronine's genericisation in 2007, to GBP258.19 (USD343.38) by July 2017, an increase of nearly 6,000%. However, production costs over this time remained broadly stable.

Concordia Revenues Faltering
Concordia's Quarterly Top-Line Results (USD000s)
Source: Concordia, BMI

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