Hydrocortisone is used to treat the life-threatening Addison’s disease istock

Pharmaceutical company Actavis has been accused of breaching competition law by raising the price of a life-saving drug by nearly 12,000%. The Competition and Markets Authority (CMA) found the company has been charging the NHS "excessive and unfair prices" for the 10mg hydrocortisone tablets by raising the cost from 70p ($1.74) in April 2008 to £88 per pack by March 2016.

The company also increased the price of 20mg hydrocortisone tablets by nearly 9,500% compared to the previous branded price, after the cost jumped from £1.07 to £102.74 in March 2016.

Hydrocortisone tablets are used as a replacement therapy for people whose adrenal glands do not produce sufficient amounts of natural steroid hormones, such as in those who suffer the life-threatening Addison's disease.

Prior to 2008, the NHS spent around £522,000 a year on the tablets. Since the price hike, it now spends in excess of £70m a year.

The CMA has now issued a "statement of objections issued" to Actavis for raising the price of the drug and accused it of breaking competition law.

Andrew Groves, CMA senior responsible officer, said: "This is a life-saving drug relied on by thousands of patients, which the NHS has no choice but to continue purchasing. We allege that the company has taken advantage of this situation and the removal of the drug from price regulation, leaving the NHS – and ultimately the taxpayer – footing the bill for the substantial price rises.

"The CMA's findings are provisional and no conclusion should be drawn at this stage that there has in fact been any breach of competition law. The CMA will carefully consider any representations of the parties under investigation before determining whether the law has been infringed."

Israel's Teva Pharmaceutical Industries, who bought Actavis earlier this year, confirmed they received the objection from the CMA and that it would defend itself against the allegations.

A spokesperson said: "Although the pricing of the acquired Actavis product, Hydrocortisone, under investigation was never under Teva's effective control, Teva believes that intervention by the CMA in prices for generic medicines raises serious policy concerns regarding the roles of both the CMA and the Department of Health."

Earlier this year, Pharmaceutical firms Pfizer and Flynn Pharma were fined a combined total of nearly £90m for increasing the cost of anti-epilepsy drug phenytoin more than 2,6000% overnight.