EU Investigates Aspen for Price Gouging
The European Commission (EC) is investigating South African pharmaceutical producer
Aspen Pharmacare on charges it raised the price of five cancer drugs by “several hundred per cent” and withdrew the treatments from some European markets in an effort to push prices higher.
Reports said this is the first time the EC has investigated a drug company for excessively high pricing. Competition Commissioner Margrethe Vestager, said Brussels will assess whether Aspen is breaching EU competition rules by “charging excessive prices for a number of medicines.” The Commission said it had received information indicating “very significant and unjustified” increases.
According to British media, which has now reported widely on the price gouging first touched on by London newspaper The Times in mid-April, the European investigation concerns the portfolio of cancer drugs Aspen bought from GlaxoSmithKline in 2009 in a deal valued at £273 million. GSK is said to have received a 16% stake in Aspen as part of the agreement, but has since sold it for about $2.2 billion.
In some European countries, Aspen reportedly jacked up prices for “irreplaceable drugs” including Busulfan and Leukeran (both leukemia), Melphalan (skin and ovarian cancers), along with Purinethol and Tioguanine. In the UK, the company is believed to have exploited a loophole that allows pharmaceutical producers to change the price of medicines if they are no longer branded under the same name.
Italian regulators have already looked at the excessive pricing issue. The drugmaker is currently appealing a €5.2 million fine imposed in 2013 by the Italian Competition Authority (ICA) for abusing its market position. Aspen allegedly threatened to stop supplying Italy with the drugs in October 2013 unless prices rose by 2,100%, and in Spain threatened to curb supply if a 4,000% price hike was not accepted.
The Times newspaper said that in both countries the hikes swept prices into line with European target prices, or even higher.
