The company, a unit of Allergan Plc, raised prices of 10 mg hydrocortisone tablets by more than 12,000 percent compared to the price they were sold at by another company before April 2008, the Competition and Markets Authority (CMA) said.
It raised the price of 20 mg hydrocortisone tablets by nearly 9,500 percent, the CMA said.
The 10 mg tablets which cost the NHS £0.70 in April 2008 cost £88 by March 2016, it found.
The tablets are used for hormone replacement therapies in people whose adrenal glands do not produce sufficient amounts of natural steroid hormones.
Pharmaceutical companies have faced regulatory scrutiny recently for buying smaller companies and then raising their prices many fold.
The CMA fined Pfizer Inc 84.2 million pounds for ramping up the cost of an epilepsy drug by as much as 2,600 percent.
Actavis UK parent Allergan Plc was created by a $66 billion merger that saw Dublin-based Actavis acquire Botox maker Allergan Inc in November 2014 and change its name to the latter.
The CMA said its findings were provisional and it would consider representations of the parties under investigation before determining whether the law had been infringed.
Follow CNBC International on Twitter and Facebook.