Pharmaceutical group agrees to pay over £380k in care home medicine cartel

Pharmaceutical group agrees to pay over £380k in care home medicine cartel

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Author: Simon Barnes

On 12 December 2013, the OFT announced a £380k settlement had been agreed in relation to a market sharing cartel involving two pharmaceutical suppliers.

The settlement follows an investigation by the OFT into agreements between Quantum Pharmaceutical Limited (Quantum) and Lloyds Pharmacy Limited (Lloyds) under which medicines were supplied to care homes between May 2011 and November 2011.

The OFT found that the parties had colluded to ensure that Quantum's sister, Tomms Pharmacy, would not supply prescription medicines to existing Lloyds' care home customers. And in return, at least for some of the time, Lloyds agreed not to supply prescription medicines to existing care home customers of Tomms Pharmacy.

Lloyds tipped off the OFT to the existence of the agreements. Consequently, Lloyds was able to benefit from the OFT's leniency policy: Lloyds, being the first to report its participation in a cartel, was able to obtain immunity from fines. Provided it continues to co-operate with the OFT, Lloyds is not expected to pay any penalty.

The Quantum/Tomms Pharmacy parent company too benefited from the OFT's leniency policy and its penalty was reduced from £646,426. Under the leniency policy, a party under investigation can enter into settlement with the OFT if it is prepared to admit that it has breached competition law and is willing to agree to a streamlined administrative procedure; in return, the OFT may agree to impose a reduced penalty on the business.