The UK’s competition watchdog has won the right to appeal against Pfizer in a decade-long legal battle over alleged excessive pricing of an anti-epilepsy drug.
The Court of Appeal overturned a previous Competition Appeal Tribunal ruling, finding it was “wrong to set aside” the Competition and Markets Authority’s original decision against the US pharmaceutical giant.
The case centres on phenytoin sodium, a drug used to treat epilepsy and relied upon by thousands of patients to prevent life-threatening seizures.
The court ruled that “the CAT found errors in the [CMA’s] Decision which, on a fair reading, the CMA did not make,” dealing a significant blow to Pfizer and its UK distributor Flynn Pharma.
The court also found that “the CAT failed to engage with, or mischaracterised, the CMA’s decision on critical issues,” and rejected claims the CMA had “examined the evidence in a biased and selective way.”
Further submissions from both parties will now be considered by the court before it decides whether to reinstate the CMA’s original decision, including substantial fines.
Juliette Enser, executive director of competition enforcement at the CMA, described it as “an important judgment” given the drug is “vital” and “relied on by thousands to prevent life-threatening seizures, and the CMA found that these companies exploited their positions to charge the NHS excessive prices.”
“The judgment confirms the Competition Appeal Tribunal was wrong to set aside the CMA’s decision — recognising that our findings were based on a fair and robust assessment of the evidence. We will now make submissions to the Court in advance of its further ruling,” Enser said.
The CMA’s investigation was first opened in 2013, after Pfizer sold its UK distribution rights for phenytoin sodium to Flynn Pharma in September 2012.
Following that deal, Flynn began selling an unbranded version of the drug manufactured by Pfizer, but at prices up to 17 times higher than Pfizer’s historic prices to Flynn.
The knock-on effect on NHS spending was dramatic, with the health service’s annual spend on the drug soaring from approximately £2.3m before 2012 to over £50m in 2013.
In 2016, the CMA issued fines of £84.2m to Pfizer and £5.2m to Flynn Pharma, and ordered both companies to reduce their prices for the drug.
Both companies appealed those fines, triggering a lengthy series of legal challenges that wound through the CAT and the Court of Appeal over several years.
The regulator reopened its investigation in August 2021, noting that both companies had “exploited a loophole by de-branding the drug,” leaving the NHS with “no choice” but to pay prices increased “overnight.”
Revised fines were then issued in 2022, amounting to £63.3m for Pfizer and £6.7m for Flynn Pharma, with both companies again appealing in 2024 before the CAT ruled in their favour.
The latest Court of Appeal judgment, following a hearing in January 2026, now reopens the prospect of those fines being reinstated as the regulator pursues its long-running case to a conclusion.