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Merck, one of the world’s largest pharmaceutical companies, has been accused by the UK’s competition watchdog of implementing an unfair discount scheme on one of its top drugs.
According to the Competition and Markets Authority’s provisional findings released on Tuesday, one of the US company’s European units - Merck Sharp & Dohme - abused its dominant market position through a discount scheme for the drug Remicade – generically known as infliximab – which is used to treat rheumatoid arthritis and Crohn’s disease.
"The CMA has provisionally found that MSD broke competition law by abusing its dominant position through a discount scheme for Remicade that was likely to restrict competition from 'biosimilar' versions of infliximab that were new to the market," the competition watchdog said in a statement.
"At this stage of the CMA's investigation, these findings are provisional and no conclusion should be drawn that there has in fact been any breach of competition law," it added.
Remicade is a key drug for Merck, even though sales declined 29 per cent last year to $1.27bn (£980m).
Merck has offices in 140 countries, including a UK headquarters at Hoddesdon in Hertfordshire.
The CMA, which opened its investigation in December 2015, said it “will carefully consider any representations by the company under investigation” before making a final decision on whether Merck breached competition rules.
MSD told Reuters it was cooperating fully with the watchdog, adding it was confident the proceedings would show it had complied with the law.
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If found guilty, the company could face fines of up to 10 per cent of its global turnover. Although the CMA emphasised this was a ceiling rather than a guideline for financial penalties.
Last year, drug firms Pfizer and Flynn Pharma were fined nearly £90m by the CMA for “unfair” pricing after hiking up the cost of an anti-epilepsy drug by up to 2,600 per cent.
Additional reporting by Reuters
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