Now the court has confirmed that the price was too high


Can a pharmaceuticals company just hike its prices by 2000 per cent because there is a shortage of the company’s medicines? Now the court has confirmed that CD Pharma could not.

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27. AUGUST 2020

For Amgros, a good dialogue with our cooperation partners is a crucial cornerstone in all our work. Therefore, disagreements with our suppliers rarely end in court. However, in 2014 the dialogue broke down. This was when CD Pharma decided to raise the price of Syntocinon by 2000 per cent. 

Up to this point, a parallel importer had supplied the uterine stimulant to Amgros at a price of DKK 43 per pack. However, when the importer was unable to deliver as agreed, Amgros bought Syntocinon from CD Pharma instead. Shortly afterwards, CD Pharma hiked the price per pack to DKK 945. Without reason.

As a result, Amgros took the matter to the Danish Competition and Consumer Authority. The Competition Council determined that CD Pharma was in breach of the Competition Act and was abusing its dominant market position. The company appealed to the Competition Appeals Tribunal, which merely upheld the decision by the Competition Council. After this, Amgros tried to get the company to refund the additional costs. But in vain. CD Pharma appealed the decision by the Competition Appeals Tribunal to the Danish Maritime and Commercial Court. The Maritime and Commercial Court upheld the decision of the Competition Council in March 2020, thereby confirming that the company was in contravention of the competition regulations when it raised its price by 2000 per cent.

CLEAR SIGNAL

In parallel with the competition case at the Maritime and Commercial Court, Amgros decided to sue CD Pharma, claiming that CD Pharma should refund the additional price. After the now more than six-year-long dispute, the Copenhagen Maritime and Commercial Court has decided the case. The ruling came on 18 August 2020. And yes, CD Pharma is liable to pay compensation to Amgros for the additional price Amgros was forced to pay because of the increase of 2000 per cent.

- “I’ve said it before. And I’ll say it again. I think it’s actually very good that, as a society, we can expect a pharmaceutical company to refrain from exploiting a monopoly to hike its prices so rapidly, as we have seen in this case. Therefore, I'm also very satisfied with the court’s decision. I hope it sends a clear signal to the market not to exploit shortages of medicines to earn extra profits,” said Flemming Sonne, CEO of Amgros.

Amgros was awarded compensation of DKK 7 million plus costs. This amount corresponds to the additional price Amgros, and thus the Danish healthcare system, had to pay for the medicine.

Unfortunately, CD Pharma has been trying to wind-up and close the company for many years. Therefore, the company is now under bankruptcy proceedings. It is uncertain whether there are enough funds to pay for the ruling.

However, no matter what, the ruling means that a company’s liability has been confirmed in such cases. That is why it is so important.

 

Karen Torgny

Senior communication specialist

I’m responsible for overall communication at Amgros, including PR. And I help to ensure that we communicate with the surrounding world in an open and engaging manner.