THE competition watchdog has launched an investigation into drug companies charging “excessive prices” to the NHS.

If the companies are found to have broken the law they face fines of up to 10 per cent of their turnover.

The Competition and Markets Authority (CMA) said: “The investigation relates to suspected unfair pricing by way of charging excessive prices in the supply of certain pharmaceutical products, including to the National Health Service.”

Health Secretary Jeremy Hunt called in the CMA in June after an investigation by The Times suggested companies were exploiting a loophole in NHS rules to raise prices of medicines.

The newspaper alleged that companies face limited competition on long-established, off-patent drugs, bought from large pharmaceutical firms.

It was also claimed that the prices of 32 drugs have risen by more than 1,000 per cent in the past five years.