European Commission Accepts Aspen Commitments and Closes First Pharmaceutical Excessive Pricing Case
The European Commission (the Commission) terminated on 10 February 2021 its first formal investigation of allegedly excessive medicine prices after accepting a series of pricing and supply commitments from Aspen Pharmacare Holdings Ltd. (Aspen) (see, attached press release and question and answer document). The commitments concern five oncological medicines sold in various presentations under the brand names Alkeran®, Lanvis®, Leukeran®, Myleran® and Purinethol®.
The Commission had opened an investigation in May 2017 over concerns that Aspen had abused its dominant position in a range of national markets by charging excessive prices for what the Commission labelled as critical medicines for the treatment of leukaemia and other haematological cancers (see, Van Bael & Bellis Life Sciences News Alert of 15 May 2017). According to the Commission, Aspen consistently earned very high profits from the sale of the cancer medicines, both in absolute terms and when compared with the profit levels of similar companies in the industry. The Commission specified that Aspen's prices exceeded its costs by almost 300% on average, even if a reasonable rate of return was factored in, and added that it saw no justification for such metrics.
The Commission also found that patients and physicians often had no alternatives for Aspen’s medicines, even though the medicines’ active substances had been off-patent for 50 years. The Commission also noted that when national authorities had tried to resist Aspen's requests for price increases, Aspen had threatened to withdraw some medicines from the list of reimbursable medicines. In some cases, Aspen had allegedly even exhibited a readiness to cease supplies to a given market.
The Commission summarised Aspen’s commitments as follows:
a) Applying a price reduction across Europe for six cancer medicines by, on average, approximately 73%.
b) Observing this reduction for ten years from October 2019 onwards.
c) Guaranteeing the supply of these medicines for the next five years, and, for an additional five-year period, either continuing to supply or making the marketing authorisations available to third-party suppliers.
The non-confidential version of the commitments, which underwent a market test (see, Van Bael & Bellis Life Sciences News Alert of 14 July 2020), is detailed in the attached document. The commitments do not apply to Italy where a different regime has applied since September 2016, following a decision by the Italian competition authority. An independent monitoring trustee will supervise Aspen’s compliance with the commitments.
In accepting the commitments, the Commission made sure to impose significant and lasting price reductions for medicines that are essential from a public health perspective. However, unlike competition authorities in Denmark, Italy and the United Kingdom in other cases, it has not offered regulators and industry the expected guidance on what constitutes excessive pricing.
Related insightsSign up for updates