CMA announces disqualification undertakings by former director of international pharmaceutical companies

By Peter Willis, Patricia Wing

06-2020

On 4 June 2020, the Competition Markets Authority (“CMA”) announced that it had secured binding competition disqualification undertakings by Mr Amit Patel, not to act as a director of any UK company for five years from 13 July 2020, in consequence of his involvement in two separate anti-competitive arrangements relating to the supply of pharmaceuticals in the UK. 

Background and the law

Mr Patel is a former director of Auden Mckenzie (Pharma Division) Limited and Auden Mckenzie Holdings Limited (Auden Mckenzie) and is currently a director of Amilco Limited (Amilco). The CMA secured the disqualification undertakings as a result of Mr Patel's involvement in market-sharing and price-fixing arrangements in relation to the supply of nortriptyline and fludrocortisone acetate while a director of Auden Mckenzie and Amilco.  The UK competition authority is unusual in having the power to apply to the courts to order director disqualification, or to accept disqualification undertakings, in the case of directors of companies involved in infringements of UK or EU competition law. 

Nortriptyline 

The CMA found in its decision dated 4 March 2020 that King Pharmaceuticals Limited (King) and Auden Mckenzie had agreed to share the supply of tablets of nortriptyline (a type of anti-depressant) to a pharmaceutical wholesaler, in breach of Article 101 of the TFEU and the Chapter I prohibition of the Competition Act 1998. Between September 2014 and May 2015, King and Auden Mckenzie agreed to fix quantities and prices to the wholesaler and agreed that King would supply only 25mg tablets and Auden Mckenzie only 10mg tablets. 

Fludrocortisone acetate 

On 3 October 2019, the CMA announced that it had issued a statement of objections alleging that Aspen Pharmacare Holdings Ltd, Aspen Global Inc., Aspen Pharma Ireland Ltd and Aspen Pharma Trading Ltd (together, Aspen) had unlawfully agreed to pay Amilco and Tiofarma to stay out of the UK market for fludrocortisone acetate 0.1 mg tablets (used to treat Addison’s Disease) in breach of Article 101 of the TFEU and the Chapter I prohibition. The CMA found that in return for agreeing to stay out of the UK market for the supply of fludrocortisone acetate, Tiofarma was given the right to be sole manufacturer of the drug for direct sale in the UK, and Amilco received a 30% share of the increased prices that Aspen was able to charge.

What happens now?

Mr Patel will serve both director disqualifications concurrently and has withdrawn his appeal against the CMA's nortriptyline decision. 

Click here to view CMA press release.

For more information please contact Peter Willis and Patricia Wing.