Two pharmaceutical companies have been fined more than £260m by the UK’s competition watchdog after the pair colluded to overcharge the NHS for almost a decade.

Drugmakers Auden McKenzie and Accord UK, formerly called Actavis UK, charged the NHS excessively high prices for hydrocortisone tablets, costing the taxpayer hundreds of millions of pounds, according to the Competition and Markets Authority (CMA).

Hydrocortisone is used to treat inflammation and irritation, often in people whose bodies do not produce enough cortisol.

The two companies hiked the price of a single pack of tablets from 70p in 2008, to £88 in 2016, increasing the cost of the drug by more than 10,000%.

“These were egregious breaches of the law that artificially inflated the costs facing the NHS, reducing the money available for patient care,” the CMA said.

The regulator added that these were “some of the most serious abuses we have uncovered in recent years”, giving the NHS “no choice but to pay huge sums of taxpayers’ money for life-saving medicines”.

Auden McKenzie paid off its rivals in a bid to discourage them from bringing out their own versions of the drug, allowing the company to retain a monopoly on production, the CMA said.

“To protect its position as the sole provider of the tablets, and enable it to continue to increase prices, Auden McKenzie also paid off would-be competitors AMCo (now known as Advanz Pharma) and Waymade to stay out of the market,” the watchdog said.

After Auden McKenzie stopped selling the drug, investigators at the CMA found that Actavis UK continued to pay off AMCo after taking over the sale of the medicine in 2015.