Excessive pricing of medicines and antitrust: not a great week for Aspen
16 June 2017
This week Aspen received two pieces of bad news. On 13 June, the South African Competition Commission (SACC) announced the opening of an investigation against Aspen for its suspected excessive prices in the provision of certain cancer medicinal products (Leukeran, Alkeran and Myleran).
The following day, the Italian administrative court of Lazio rejected the appeal brought by Aspen against the decision of the Italian Antitrust Authority (IAA) of September 2016, in which it found that Aspen had abused its dominant position by charging excessive prices for the supply of life-saving medicinal products for cancer patients Alkeran, Leukeran, Purnethol and Tioguanina, and imposed a fine equal to Euro 5.2 million. It will be interesting to read the reasoning of this ruling, which should be published in the next 45 days. In fact, the IAA decision touched a number of controversial points, including the test used to conclude that Aspen was dominant and the methodology for determining excessive prices.
In the meantime, the troubles for Aspen in Italy are not over. On 1 March 2017, the IAA opened an investigation against Aspen alleging that it did not comply with its previous decision ordering Aspen to adopt all the necessary initiatives aimed at defining fair market prices for its medicinal products. In particular, the IAA said that Aspen would have adopted a dilatory conduct in the negotiation with the Italian Medicines Agency (AIFA), including requesting to use abusive prices as a basis for the negotiation. It will be interesting to see how this investigation will end since it goes down to the heart of the problem: finding a reasonable way to determine whether the price is higher than it should be.
The battles for Aspen are not finished: other pending investigations have been commenced early this year by the European Commission and the Spanish Competition Authority. These multiple probes suggest a need of a strict coordination among authorities in order to avoid inconsistent outcomes, also taking into account the fact that those investigations often concern the same medicinal products despite marketed in the context of different regulatory frameworks.
It is now clear that excessive pricing cases against pharmaceutical companies will keep antitrust authorities busy for the next years. In this respect the words of the SACC Tembinkosi Bonakele become significant: “The Commission has identified the healthcare sector, and in particular pharmaceuticals, as a priority sector for its enforcement efforts due to the likely negative impact that anti-competitive conduct in that sector would have on consumers in general and specifically the poor and vulnerable.” Moreover, specifically in Italy, AIFA and the IAA signed a memorandum of understanding in January 2017 aiming at increasing cooperation, information exchanges, and coordination of their enforcement functions.
This post was originally co-authored by Marco de Morpurgo.