A US drugs company, Genzyme, was yesterday fined a record £6.8m for the way it controls the price of its enzyme treatment which can cost the NHS more than £60,000 a year for each adult patient.
The penalty by the office of fair trading is the second highest under the 1998 Competition Act and the biggest imposed on a drug company. Genzyme is preparing to appeal at a competition tribunal.
Genzyme charges the NHS a blanket price for the drug, which offers the only effective treatment for many patients with Gaucher disease which can lead to severe disability and death. This sum covers not only the treatment, which is administered intravenously, but also delivery to patients' homes and nursing support.
The OFT says this effectively ensures that only Genzyme, or a company under contract to it, can provide services since independent providers could have no margin for profit.
The company says its drug, Cerezyme, is used on fewer than 200 of the 250-300 Britons with Gaucher disease. Of these only about 30 receive regular nursing support.
The drug uses ovary cells from Chinese hamsters to make an artificial enzyme for patients whose bodies cannot process products from their cells which therefore form deposits around their livers, spleens, bones and joints.
Cerezyme is not suitable for all types of the disease which affects around 40,000 people worldwide. Only about 3,000 might be on Cerezyme.
The company now provides an all-round service and Healthcare at Home, which used to have the contract to supervise delivery and administration, filed a complaint.
John Vickers, director general of the OFT, said: "Genzyme's abuse of its dominant market position has prevented viable competition and choice. This constitutes a serious infringement of the Competition Act and this is reflected in the level of the penalty."
The cost to the NHS for the average adult patient is around £2,400 a fortnight. Genzyme has been ordered to supply the NHS at a stand-alone price and not to charge extra to any third party which might offer homecare services.
The fine is the highest levied by the OFT for "exclusionary pricing" although the Argos chain was fined £17.28m earlier this year for fixing the prices on toys and games. The maximum fine that can be imposed in such cases is 10% of companies' UK turnover over up to three years, but the OFT could not say what proportion the Genzyme fine represented because it was commercially sensitive information.
The company said the fine represented 10% of its Cerezyme turnover in Britain over the past four years.
Malcolm Johnson, vice-president of Genzyme Therapeutics in the UK and Ireland, said the fine was not realistic."With only around 30 of the Gaucher patients under treatment in the UK receiving regular nursing support, this equates to a fine of £230,000 per patient.
"This interference in the pricing for pharmaceuticals by the OFT could damage research into new treatments for rare diseases."