European Parliament Raises Issue of Alleged Excessive Pricing of Orphan Medicine
In a response to two parliamentary questions of 6 February 2019, the member of the European Commission (the “Commission”) responsible for health and food safety Vytenis Andriukaitis announced that the case of chenodeoxycholic acid Leadiant (“CDCA”) will be taken on board in the European Commission’s ongoing assessment of the rules governing orphan medicines. According to the Commissioner, the case is also likely to inform competition investigations of possible excess pricing cases (see attached parliamentary questions and answer).
CDCA is indicated for the treatment of patients afflicted with cerebrotendinous xanthomatosis, a rare metabolic disorder. These patients are unable to produce enough of the primary bile acid chenodeoxycholic acid. When primary bile acids are lacking, the body produces abnormal bile acids and other substances instead which accumulate throughout the body, causing damage. Because the number of patients with this condition is very limited, the disease is considered ‘rare’, and CDCA was designated as an orphan medicine in December 2014.
CDCA is also a hybrid medicine in that it is similar to a reference medicine, Xenbilox, with the same active substance. However, Xenbilox differs from CDCA in that it is only authorised to dissolve cholesterol gallstones, an indication in use since the 1970s under the name Chenofalk.
Leadiant Biosciences (“LB”), the marketing authorisation holder of CDCA, is accused of having monopolised chenodeoxycholic acid and then acquired the exclusive marketing rights associated with the orphan medicine designation of CDCA. The price for the medicine would have gone up considerably. According to one of the Members of Parliament who raised the issue, LB now charges EUR 140 per pill in specific markets, while the medicine cost 30 eurocents per pill when it was still sold as an anti-gallstone medicine.
The accusation of excessive pricing is understood to be under review by the Dutch competition authority.
The case raises a range of issues and themes that have recently come to the fore in political discussions across the European Union, including the status of orphan medicines; the tackling of excessive prices under the competition rules (the European Commission has not only started a procedure of its own in another file, but says it also supports various efforts of national competition authorities in that area); and possible cooperation among Member States with regard to medicine pricing and reimbursement, a controversial subject which the Commission stresses belongs to the exclusive competencies of the individual Member States.