Rip-off News round-up. Our pick of the last week's media (Thu 13th August)

Pfizer and Flynn overcharged NHS by £40m+, says Competition and Markets Authority

Drug companies Pfizer and Flynn Pharma are facing claims that they breached competition law by abusing their market dominance to charge “excessive and unfair” prices for an anti-epilepsy drug. The Competition and Markets Authority (CMA)says that for years industry giant Pfizer, which is listed in the US, and Flynn, a Stevenage-based company, between them sold the drug at a price up to 27 times higher than it had been previously priced. Before September 2012, Pfizer manufactured and sold phenytoin sodium capsules to UK wholesalers and pharmacies under the brand name Epanutin. Pfizer then sold the UK distribution rights for Epanutin to Flynn, which 'de-branded' the drug and started selling its version in September 2012. Pfizer continued to manufacture the drug, which it sold to Flynn at prices the CMA says were “significantly higher” than those at which it had previously sold Epanutin. If the companies are found to have breached the law, the CMA has the power to fine then up to 10pc of their global annual turnover - last year Pfizer had revenue of almost $50bn. Before Flynn bought the rights for Epanutin, the NHS spent about £2.3m on phenytoin sodium capsules a year, according to the CMA. After the deal this spend rose to just over £50m in 2013 and more than £40m in 2014. TELEGRAPH

US adopts rule to reveal CEO-to-staff pay ratio

The Securities and Exchange Commission, the US market regulator, voted by 3-2 yesterday to adopt a rule that requires listed companies to disclose the pay ratio between chief executives and their median employee. The rule is supported by unions and Democrats worried about persistent income inequality, but opposed by companies that call it a costly and time-consuming gimmick. John Engler, president of the Business Roundtable, a lobby group of chief executives, said: “It’s costly, meaningless, and all it does is create compliance risks for business and talking points for people trying to score political points.” Richard Trumka, president of the AFL-CIO (the US’s biggest union federation), commented that complaints about the difficulty of implementing the rule were nonsense: “Employers should already have this information on the books. Dodd-Frank asks companies to do some simple calculations, not put a man on Mars.” He noted that Walmart’s chief executive Doug McMillon earned $19.4m in 2014 — although that included performance-related stock grants not yet vested — while the retailers’ typical employee starts on $9 an hour. “American consumers and workers . . . have a right to accountability and transparency when it comes to the pay practices of corporations,” Mr Trumka wrote. “Wage and income inequality has spiralled out of control.” US presidential candidates from both parties have pointed to inequality and middle-class wage stagnation as one of the most pressing issues in the 2016 election. FINANCIAL TIMES

Sixth form colleges left on starvation rations by government cuts

Almost four out of every 10 sixth form principals say it is likely their college will cease to be a going concern within five years, while seven out of 10 say they cannot provide students with a quality education with the money they are set to receive next year. The research was published by the Sixth Form Colleges Association (SFCA), which represents England’s 93 sixth form colleges. In contrast with schools, where the government has largely protected budgets, sixth form colleges have been subjected to three separate funding cuts since 2011, with the threat of more to come as the treasury seeks further savings. As a result students are being taught in larger classes, courses are being dropped and enrichment activities slashed. Steve Oxlade, principal of Reigate college and executive principal at Coulsdon college, said: “The situation is as dire as you can imagine. My guess is that by 2020 no more than 10 sixth form colleges will be financially viable unless they take drastic action now.” There were more than 120 sixth form colleges in 1992. Seventy-two per cent of sixth form principals say they have had to drop courses, with 39% forced to do so in modern foreign languages. A-levels in German, Spanish and French have been the main casualties. Almost a quarter (24%) have cut STEM subjects (science, technology, engineering and maths), regarded by the government as vital in ensuring that young people are equipped for a modern workforce. In addition, 76% of colleges say they have cut extracurricular sport, music, drama and educational visits, and 81% have larger classes as a result of recent cuts. At Reigate college, Oxlade has seen his annual budget shrink from £12.1m in 2012 to £9.7m in 2016; as a result, students now have less teaching time, teacher workload has gone up 18%, and 15% of staff have gone part-time. GUARDIAN

Pizza Express: angry staff launch protests over slice taken off their hard-earned tips

Pizza Express keeps, as an admin fee, 8p out of every £1 paid when tips are given by card. The chain, which has 430 branches around the UK and is particularly popular with families, makes an estimated £1m a year from the practice, according to the union Unite. Protests are being organised by local branches of Unite and the first will take place at the British Museum branch of Pizza Express in London. The union has also written to the restaurant chain’s CEO, Richard Hodgson. Unite began the campaign following a survey of its Pizza Express members after the chain was sold to a Chinese private equity firm, Hony Capital, last year. One of the top issues was the 8% deduction from their tips. Pizza Express joins restaurant chains Ask and Zizzi in siphoning off 8% of the tips paid by card, but other chains deduct even more. Café Rouge, Bella Italia and Belgo deduct 10%, as do Strada and Giraffe, which is owned by Tesco. But other restaurant groups do not deduct an admin fee from tips. Wagamama, Pizza Hut and TGI Friday all take nothing. The Restaurant Group, which owns Frankie & Benny’s, Chiquitos and Garfunkels, used to charge 10% but dropped this policy several years ago. A spokesperson for Pizza Express said that its admin charge was to cover the cost of running a “tronc” – a standard pay arrangement used to distribute tips among staff. Conservative MP Andrew Percy, who has called for a change in the law that would give restaurant staff more control over tips, said he plans to raise the issue in parliament after the summer recess. GUARDIAN

Cameron wants peerage for banker who gave the Tories £2.5m and offered week on his island for party's auction

David Cameron risks a major cronyism row with plans to send one of the Tory party’s biggest donors to the House of Lords. James Lupton, who has donated £2.5million to the Conservatives, is in line for a peerage in the controversial dissolution honours list. The investment banker is joint treasurer of the party and was in charge of raising money for its election war chest. He also reportedly hosted a table at the Tories’ infamous Black and White fundraising ball in February, donating a week-long trip for 24 people to his £56million La Fortaleza estate on the Bay of Pollenca in Majorca. The estate has a 17th-century fortress, five more houses, two swimming pools and a helipad. The holiday was the most expensive lot at the fundraising auction and went for £220,000. Mr Lupton is among around 40 party supporters expected to further bloat the ranks of the upper chamber and take its membership over 800 when the honours are announced within days. The dissolution honours are mired in controversy over expectations that a ‘big handful’ of donors will be rewarded, and a backlash over initial plans for 100 new Tory peers. Since 2010, thirteen of Cameron’s 83 new Tory lords were donors, who between them have given some £23million. DAILY MAIL

Boots, Tesco and Superdrug to get access to NHS medical records

Health officials have drawn up plans to send sensitive data from GP surgeries to pharmacies across the country, starting this autumn, without considering the views of patients. NHS England says the scheme will ease pressures on family doctors, and improve the care given to patients in the High Street. But campaigners fear major commercial chains will be able to exploit the valuable data, and use it to push the sales of their products. Officials have now ordered the national rollout of the scheme, on the basis of an evaluation of pilots in 140 pharmacies which they say showed “significant benefits”. But the official report, seen by The Daily Telegraph, shows that the research garnered responses from just 15 patients – a sample so small that their views were discarded from the research. The scheme got the green light, after the pharmacists involved in the pilots gave it their backing. Privacy campaigners described the revelations as “extraordinary”. They said the scheme could leave the public exposed to heavy marketing tactics, from firms with inside information about their health. Phil Booth, from campaign group medConfidential, said the valuable data would prove “irresistible” to the commercial firms which could exploit it. “This approach to medical confidentiality is corroding trust in the NHS,” he said. Summary care records are held on all NHS patients, unless they specifically opt out. The data from them will be sent on to all pharmacies, starting this autumn, but pharmacists have to ask patient’s for “permission to view” the record during any encounter. TELEGRAPH

Airport shops VAT scam: customers threaten not to show boarding passes

Shops at airports are facing a consumer revolt over claims that retailers are asking customers to show boarding cards to legally avoid paying VAT, but without passing discounts on to customers. The accusation is that information on boarding cards is being used to claim VAT relief on sales to travellers leaving the EU. Retailers do not have to pay 20% VAT on goods sold to customers travelling outside the EU. Customers reported that they were told by checkout staff that scanning the boarding pass was “the law”, “for a survey” and “for security.” The revolt comes after Treasury minister David Gauke said some retailers were not passing on savings to customers. Speaking to the Independent, he said: “The VAT relief at airports is intended to reduce prices for travellers, not as a windfall gain for shops. In a email to the Guardian, customer Sean Fowler, who tried to buy some headphones, said: “After an ‘it’s not’, ‘it is’ exchange, I left the headphones on the desk and walked away wondering whether the staff actually believed that it was the law or whether that was the line they were asked to by management.” Others were annoyed at being directed to WH Smith’s self-service checkouts where it is impossible to buy items, including newspapers which are VAT-free, without scanning a boarding pass. Jonathan Stanton, head of digital retail at Nintendo and a regular traveller, said he wanted the VAT he had paid in duty-free shops to be refunded. He said he felt cheated. “It’s unfair if they pocket the money,” he said. “It’s basically the VAT that we pay and they are pocketing it.” GUARDIAN

Milk Wars: Asda caves in to pressure from dairy farmers and raises purchase price

Asda has caved in to pressure from dairy farmers and raised the price it pays its milk supplier, as figures show that sales of fresh milk in Britain are on course to hit their lowest level by value in eight years. Britain’s third-largest grocer said it is increasing the supplier price to “a level that will assist” farmers. Asda will commit to paying 28p per litre for 100% of its liquid milk volume throughout its entire range. Dairy farmers have accused the big retailers of squeezing their suppliers, to fuel their price war, to the extent that dairy farmers are forced to sell at below cost. The retailers blame a worldwide oversupply of milk, and drop in demand. As a result, farmers have been protesting by leading their cows through supermarkets, as well as buying trolley-loads of milk and giving it free to customers along with their protest message. Morrisons has responded to the debate by launching a new milk brand called Morrisons Milk For Farmers which will be 10p more expensive per litre, with the premium returned directly to dairy farmers. This means a four-pint bottle of the Morrisons Milk For Farmers will cost £1.12, compared with 89p for Morrisons’ standard own-brand milk. GUARDIAN