The competition watchdog has slapped three drugs firms with £2.3 million in fines after they took part in an illegal deal to benefit from a price hike on a life-saving NHS medicine.

The Competition and Markets Authority (CMA) said it has also secured £8 million to go directly to the NHS after the companies admitted their actions.

Pharmaceutical firms Amilco and Tiofarma agreed with rival Aspen that they would stay out of the market for fludrocortisone, a drug relied upon by thousands of patients, so that Aspen could remain the sole supplier in the UK.

Fludrocortisone is a prescription-only medicine which is mainly used to treat primary or secondary adrenal insufficiency, commonly known as Addisons’s disease.

The CMA said the drug is paid for by the NHS so is ultimately covered by UK taxpayers.

It said Aspen increased the price of the drug by up to 1,800% after signing the agreement with its rivals.

Amilco agreed that it would receive a 30% share of increased prices that Aspen was able to charge on the drug, the CMA said.

Meanwhile, Tiofarma was given the right to be sole manufacturer of the drug for direct sale in the UK.

The watchdog said it levied fines of just under £2.3 million to the firms after they admitted taking part in the anti-competitive agreement.

Last year, Aspen also came forward to the CMA and agreed to pay the NHS £8 million to help resolve the competition concerns in relation to fludrocortisone.