UK Court of Appeal Rules Pfizer and Flynn's Anti-Epileptic Drug Pricing Constitutes Abuse of Dominant Position

Recently, the UK Court of Appeal made a final ruling, dismissing all previous appeals filed by Pfizer and Flynn Pharma, and upholding that the two companies abused their dominant position by engaging in excessive pricing for phenytoin sodium capsules, a drug used for the treatment of epilepsy.

The core product at issue is phenytoin sodium capsules, a fundamental medication for epilepsy. Prior to September 2012, Pfizer sold the drug under the brand name "Epanutin," with its price strictly regulated by the UK Department of Health. However, Pfizer circumvented the price regulatory regime by granting the UK distribution rights to Flynn Pharma, and having Flynn "de-brand" the product and sell it as a generic drug.

Data showed that Pfizer's supply price to Flynn increased by 780% to 1,600% compared with the previous branded price, while Flynn's selling price to the UK National Health Service (NHS) was marked up by a further 2,300% to 2,600% on top of its acquisition cost. For example, the price for a 100 mg pack soared from £2.83 to £67.50. As a result, the NHS's annual expenditure on this drug surged from approximately £2 million in 2012 to about £50 million within just one year, placing a heavy burden on the already stretched public healthcare system.

The UK Competition and Markets Authority (CMA) investigation concluded that Pfizer and Flynn held a collective dominant position in the UK market for phenytoin sodium capsules, and that their pricing conduct infringed the Chapter II prohibition of the Competition Act 1998 and Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibit abuses of a dominant position.

This case is one of the longest-running and most procedurally convoluted antitrust enforcement cases in the UK. Since the initial penalty decision in 2016, it has spanned nearly a decade, involving two CMA administrative rehearings, two judicial reviews by the UK Competition Appeal Tribunal (CAT) (whose core function is to hear judicial appeals against decisions of the CMA), and two appellate hearings before the England and Wales Court of Appeal.

In June 2026, the Court of Appeal rendered its final judgment, comprehensively overturning the CAT's previous reversal of the CMA's decision and fully endorsing the CMA's original findings. The Court explicitly stated that the CAT had "misread or misconstrued" the CMA's decision on several key issues. At the same time, the Court set aside the CAT's re-imposed penalty decision on grounds of procedural fairness, meaning that the amount of the fine will still need to be redetermined in subsequent proceedings. The China IP Lawyer website will continue to follow further developments.