Canadian pharmaceutical firm Concordia has been accused by the UK's top competition regulator of overcharging the NHS for an essential thyroid drug.
A Competition and Markets Authority (CMA) investigation found that the NHS spent more than £34m ($45m) on liothyronine tablets last year, an increase from around £600,000 a decade earlier.
The amount it paid per pack rose from around £4.50 in 2006 to £258.20 last year, an increase of nearly 6000%, despite the drug's production costs remaining broadly the same.
Liothyronine tablets are used to treat hypothyroidism, a condition that affects at least two in every 100 people and which can lead to depression, tiredness and weight gain.
Concordia was the only supplier of the drug in the UK until earlier this year, and the CMA said that for many patients there are no suitable alternative treatments available.
"Pharmaceutical companies which abuse their position and overcharge for drugs are forcing the NHS – and the UK taxpayer – to pay over the odds for important medical treatments," said Andrea Coscelli, chief executive of the CMA.
"We allege that Concordia used its market dominance in the supply of liothyronine tablets to do exactly that.
"At this stage in the investigation, our findings are provisional and there has been no definitive decision that there has been a breach of competition law."
Concordia can now present its own views and evidence before the watchdog makes its final decision.
The Canadian company denied it had abused its dominant position in the market to overcharge for the drug.
"We do not believe that competition law has been infringed. The pricing of liothyronine has been conducted openly and transparently with the Department of Health in the UK over a period of 10 years," Concordia said in a statement.
"Over that time, significant investment has been made in this medicine to ensure its continued availability for patients in the UK.
"We will review the CMA's preliminary position, as set out in its statement of objections, and we will be responding to it in detail."