Public bodies, as well as suppliers of products and services to the public sector, need to be aware that the Competition and Markets Authority (CMA) will not only take action to ensure that markets work well for consumers and businesses, but will also take action to make markets work well in the interests of the public sector. The fact that the UK government, or a public body, is the primary customer in a particular market may be a relevant factor in the CMA's decision to take enforcement action or investigate a market. Action by the CMA can lead to substantial savings for the government and, ultimately, taxpayers.

In recent years, there have been several competition investigations involving the pharmaceutical sector where the CMA has imposed significant fines for competition law breaches. Two cases in 2020 resulted in repayments being made to the publicly-funded NHS:

• Supply of fludrocortisone (for Addison's disease) – three companies admitted taking part in an anti-competitive agreement for the supply of this medicine. The CMA imposed total fines of £2.3 million, and one party (Aspen) paid £8 million to the NHS to address the CMA's concerns that the NHS had paid a higher price for the drug because of Aspen's unlawful behaviour. Aspen also gave commitments about the future supply of fludrocortisone, so the NHS could save money on future purchases. This was the first time a CMA investigation secured a payment to the NHS; and

• Supply of nortriptyline (for depression) – the CMA fined four parties over £3.4 million for their involvement in market-sharing and the illegal sharing of commercially sensitive information. The CMA's investigation also led to a payment of £1 million being made directly to the NHS.

The CMA's work in the pharmaceutical sector continues. Most recently, in February 2022, the CMA fined companies more than £35 million for agreeing to limit the supply of NHS prescription anti-nausea tablets (prochlorperazine). This included a fine on a private equity company that had owned one of the pharmaceutical companies concerned for part of the relevant period. Andrea Coscelli, Chief Executive of the CMA, has made it clear that: "All firms should know that we will not hesitate to take action like this against any businesses that collude at the expense of the NHS."

The CMA has not limited its action to competition enforcement cases, or to the pharmaceutical sector. It is currently investigating other sectors that are of particular relevance to public authorities, namely:

• Children's social care – according to the CMA's interim report published in October 2021, local authorities (funded by taxpayers) are often paying higher prices to private providers for children's placements than they would otherwise. As a result, large private sector providers of children's homes and fostering services appear to have been making higher profits in England and Wales than the CMA would expect in a well-functioning market.
• Mobile radio network services for public safety – on 25 October 2021, the CMA launched a market investigation into the radio network used by all the emergency services in Great Britain. The CMA is concerned that customers, and ultimately taxpayers, are paying more for the services because of the dual role of Motorola as the owner of the company providing the current mobile radio network and as a key supplier in the roll-out of the planned new network, which has been delayed from 2019 to 2026.

In the children's social care market and the radio network market, the local authorities and the Home Office, respectively, were found to be in weak bargaining positions and unable to secure value for money.

The Payment Systems Regulator (PSR) has also joined the CMA in defending public funds. In its first competition enforcement decision in January 2022, it fined five companies more than £33 million for cartel behaviour in the prepaid cards market. The companies were found to have colluded in providing prepaid card services to local authorities, which used the cards to make welfare payments to vulnerable people, including the homeless and asylum seekers. The PSR commented that this case was particularly serious because the illegal cartel behaviour meant there was less competition and choice for local authorities.

Conclusion

These examples highlight the role that competition law can play in helping to ensure that public authorities, and ultimately UK taxpayers, do not pay more than they should for essential products or services. The payment of monies to public bodies is a relatively recent development that to date has been limited to the pharmaceutical sector. It remains to be seen whether this practice will extend to other sectors where public authorities are the principal purchasers of goods or services – for example, in the transport, housing or healthcare sectors.