Mississauga, Ontario, January 30, 2019 - ADVANZ PHARMA Corp. (“ADVANZ PHARMA” or “the Company”) (TSX:ADVZ), an international specialty pharmaceutical company focused on helping innovate, shape and grow the specialty, off-patent sector in Europe so that patients can continue to access high quality medicines, today commented on the issuance by the UK Competition and Markets Authority (the "CMA") of a Supplemental Statement of Objections ("SSO") to the Company and the former owners of the Company's International segment, Hg Capital and Cinven, in relation to the pricing of Liothyronine in the United Kingdom between January 2009 and July 2017.
A SSO is generally provided by the CMA where it wishes to provide new or alternative grounds to those contained in its Statement of Objection (“SO”) to explain its preliminary view that a competition law infringement may have occurred. It is a provisional view, not a final decision.
The Company commented: “We are committed to ensuring continued access to high quality, off-patent medicines for patients in the UK and provide many medicines which offer significant savings to the NHS. We take competition law very seriously and do not believe that competition law has been infringed. The pricing of Liothyronine has been conducted transparently with the Department of Health (DH) in the UK over a period of 10 years, with price increases notified in advance and implemented only after approval from the DH. Over that time, the Company has made significant investment in this medicine to ensure its continued availability for patients in the UK to the specifications required by the Medicines and Healthcare products Regulatory Agency (MHRA). We will review the CMA's updated position as set out in its SSO, and will be responding to it in detail. We continue to work co-operatively with the CMA as it proceeds with its investigation.”
Today’s SSO includes matters that pre-date the Company’s ownership of its International segment which it acquired from Cinven and certain other sellers as a result of its transaction to purchase Amdipharm Mercury Limited ("AMCo"), which closed on October 21, 2015.
The two former owners of AMCo, Cinven and Hg Capital, are also named in the investigation.
Notes to Editors
- The CMA investigation into Liothyronine commenced in October 2016. The CMA issued a SO on November 21, 2017, and the Company responded to it on April 20, 2018. During 2018, the CMA discontinued investigations into four other products of the Company.
- Although the UK generics regulatory system is based on free pricing, the DH has various powers to intervene in relation to the price of any non-branded generics under Scheme M (of which ADVANZ PHARMA is a member) and various NHS Acts.
- The pricing of Liothyronine has been conducted transparently with the DH in the UK over a period of 10 years, and from 2011, the Company notified the DH of all price increases in relation to Liothyronine in advance and only implemented them after approval had been obtained from the DH.
- Over that time, the Company made significant investment in this medicine to ensure its continued availability for patients in the UK to the specifications required by the Medicines and Healthcare products Regulatory Agency (MHRA), both to the medicine and in the manufacturing operations.
- The CMA has reduced its period of alleged infringement, changing it from 2007-Jul 2017 to Jan 2009-July 2017.
- The Company provides many medicines offering significant savings to the NHS with approximately 25 per cent of its UK medicines selling at or below cost.
- In a highly competitive market, the price of medicines can increase or decrease
due to a number of factors, namely:
- the number of competitors in the market
- global demand
- cost of raw materials
- cost of manufacturing
- new regulatory requirements driving up costs such as serialisation
- fluctuations in exchange rates
- generic companies being unwilling to carry on selling unprofitable products or exiting the market driving down competition
- supply constraints/shortages
- The UK generics industry is highly competitive, generating approx. £13 billion[i] savings each year, making it one of the most cost-effective healthcare reimbursement schemes in Europe.
About ADVANZ PHARMA
ADVANZ PHARMA is an international specialty pharmaceutical company with a diversified portfolio of more than 200 patented and off-patent products, and sales in more than 90 countries. Going forward, the Company is focused on helping innovate, shape and grow the specialty, off-patent sector in Europe.
ADVANZ PHARMA operates out of facilities in Mississauga, Ontario and, through its subsidiaries, operates out of facilities in Bridgetown, Barbados; London, England and Mumbai, India.
Notice Regarding Forward-looking Statements and Information:
This press release includes forward‐looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward‐looking information within the meaning of Canadian securities laws, regarding the Company and its business, which may include, but are not limited to statements with respect to the CMA investigation, the Company working with the CMA as it proceeds with the investigation, the Company’s belief that it has not breached competition laws, the Company’s plans to respond to the CMA’s updated position, defining the Company as a global pharmaceutical company that is determined to help innovate, shape and grow the specialty, off-patent sector, and the ability of the Company to ensure access to high quality, off-patent medicines for patients in the UK and provide many medicines which offer significant savings to the NHS. . Often, but not always, forward‐looking statements and forward‐looking information can be identified by the use of words such as “plans”, “is expected”, “expects”, “scheduled”, “intends”, “contemplates”, “anticipates”, “believes”, “proposes”, “aims”, “becomes”, “sees”, “looks” or variations (including negative and grammatical variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Such statements are based on the current expectations of the Company’s management, and are based on assumptions and subject to risks and uncertainties. Although the Company’s management believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect. The forward-looking events and circumstances discussed in this press release may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the Company, including risks associated with the CMA investigation, the inability to help innovate, shape and grow the specialty, off-patent sector, the inability of the Company to go beyond its past achievements and current industry standards, the inability to build on the Company’s current capabilities and global footprint, the Company being unable to meet the increasingly complex needs of global healthcare systems, the Company’s inability to build on its current capabilities and global footprint, the Company’s inability to become a trusted and respected partner to its customers, healthcare providers, and patients, the Company’s inability to supply a diverse range of high quality, established medicines, the Company’s inability to expand its global presence, the Company’s inability to provide a platform for future growth, the Company’s inability to expand its portfolio of medicines and to pursue its acquisition strategy, the Company’s inability to provide greater access to medicines for patients, the Company’s inability to provide sustainable value for healthcare providers, the Company’s inability to maintain its current financial position, the risk that the Company’s shareholders do not support the Company’s current strategy, the Company’s inability to deliver a progressive company that is ready for the future, the Company’s inability to leverage its current balance sheet to build out its pipeline of medicines, the Company’s inability to leverage its balance sheet to acquire both companies and standalone medicines, the Company’s inability to be the most idea-generative company in the generics industry, and risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission and the Canadian Securities Administrators and many other factors beyond the control of the Company. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements and forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement or forward-looking information can be guaranteed. Except as required by applicable securities laws, forward-looking statements and forward-looking information speak only as of the date on which they are made and the Company undertakes no obligation to publicly update or revise any forward-looking statement or forward-looking information, whether as a result of new information, future events, or otherwise.
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