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May 15, 2017

EC to Investigate Aspen Pharma Cancer Drug Price Hikes

  • The European Commission said today that it launched a formal investigation into whether Aspen Pharma has abused its dominant market position in cancer treatments to overcharge for five drugs—the first time the EC has ever probed concerns about excessive pricing practices in the pharmaceutical industry.

    Investigators will study Aspen's pricing practices for medicines containing the active pharmaceutical ingredients chlorambucil, melphalan, mercaptopurine, tioguanine, and busulfan. The treatments are indicated for hematologic tumors and other forms of cancer, and have been sold with different formulations and under multiple brand names. Aspen acquired the medicines from GlaxoSmithKline in 2009 following expiration of their patent protection.

    The investigation comes a month after The Times of London reported that Aspen staffers discussed destroying supplies of the five cancer medicines as part of a plan to raise the price of the treatments by up to 4000%--with the company imposing triple-digit price increases. According to The Times, Aspen hiked the price of leukemia treatment busulfan from £5.20 to £65.22 ($6.72 to $84.24) a pack in England and Wales during 2013, and boosted the price of chlorambucil from £8.36 to £40.51 ($10.80 to $52.33) that year.

    The company’s plans to drive up prices emerged in documents obtained by the newspaper following a dispute between Aspen and Spain's health service in 2014 that subsequently spread to Italy.

    The Commission said it will investigate information indicating that Aspen engaged in price gouging by imposing “very significant and unjustified” price increases of up to several hundred percent.

    “When the price of a drug suddenly goes up by several hundred percent, this is something the Commission may look at. More specifically, in this case we will be assessing whether Aspen is breaking EU competition rules by charging excessive prices for a number of medicines,”  Margrethe Vestager, the EC Commissioner in charge of competition policy, said in a statement.

    The Commission said Aspen’s actions may have violated EU antitrust rules—Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the European Economic Area (EEA) Agreement—which forbid the imposition of unfair prices or unfair trading conditions on customers.

    The investigation covers all of the EEA except Italy, where the Italian Competition Authority (ICA) last year imposed a fine of more than €5 million (about $5.5 million) against Aspen for violating Article 102 by imposing increases of up to 1500% on the cancer treatments.

    “The negotiation strategy adopted by Aspen was so aggressive as to reach the credible threat of interrupting the direct supply of the drugs to the Italian market,” the ICA said in a statement at the time. “Through this negotiation strategy, Aspen obtained an extremely high increase in prices, ranging between 300% and 1500% of the initial prices.”

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