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Mediclinic News : Aspen, Roche, Pfizer investigated for excessive cancer drug pricing

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Aspen, Roche, Pfizer investigated for excessive cancer drug pricing

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2017-06-13

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MONEYWEB Eleanor Becker CompCom identifies pharmaceuticals as ‘priority sector’ for its enforcement efforts. The Competition Commission (CompCom) is investigating Roche Holdings, pharmaceutical giant Pfizer and Aspen Pharmacare for alleged excessive cancer drug pricing. Roche is being investigated for the pricing of breast cancer medicine, Pfizer for lung cancer medication and Aspen for suspected abuse of dominance in charging excessive prices for cancer medicines. In a statement released on Tuesday, the CompCom said it 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”. CompCom commissioner Tembinkosi Bonakele announced the investigations at a media briefing on Tuesday. He said: “This is a priority investigation for us. We have to treat this with the urgency and sensitivity it deserves – there are still many patients in need of these drugs.” Bonakele said the abuse of patents would be looked into, adding that a perpetual monopoly aided by patents was unlawful. The CompCom is to get evidence from patients in its investigation. Aspen Information suggests Aspen’s has engaged or is engaging in excessive pricing in Leukeran – a chemotherapy medication treating chronic lymphocytic leukemia, Hodgkin lymphoma, and non-Hodgkin lymphoma; Alkeran, used to treat bone marrow cancer and epithelial ovarian cancer; and Myleran, used in pediatrics and adults. Aspen appears to be a dominant firm in the provision of these drugs. In a Sens released on Tuesday afternoon, Aspen says it has noted the CompCom announcement and is committed to “full and constructive” engagement with the commission in its investigation. “It is reiterated that pharmaceutical prices in South Africa are approved by the Department of Health in terms of the Single Exit Price regulatory framework, which establishes a universal fixed price for each pharmaceutical product. Aspen has not increased pricing of its products outside of this regulatory framework and has clearly demonstrated its commitment to providing quality medicines affordably over many years. The supply of the oncology products in question is no exception,” the Sens reads. At 15:20 on Tuesday, Aspen’s shares were flat in Johannesburg at R275.04. The Public Investment Corporation (PIC) is Aspen Pharmacare’s biggest shareholder, with a 10.87% stake. Deon Botha, PIC head of corporate affairs, comments: “We understand that this matter is a subject of investigation by the Competition Commission. It is, however, necessary to mention that we prefer that investee companies abide by the laws and regulations of countries in which they operate and that they act responsibly in their dealings.” Aspen under fire in the EU In May, Reuters reported here that the European Commission was investigating whether Aspen Pharmacare charged excessive prices – up to several hundred percent – for five key cancer drugs and has withdrawn the drugs in some EU countries or threatened to do so in others. “Companies should be rewarded for producing these pharmaceuticals to ensure that they keep making them into the future. But when the price of a drug suddenly goes up by several hundred percent, this is something the commission may look at,” European Competition Commissioner Margrethe Vestager was quoted as saying. “Given that Aspen supplies similar products (i.e. Alkeran, Leukeran and Myleran) in South Africa, the commission has reasonable grounds to suspect that Aspen may be engaging in similar conduct locally,” said the CompCom. “Moreover, Aspen appears to be either the only supplier or at least a dominant supplier of these products in both the South African and European markets. Given that Aspen’s products are listed as generic products, it is of concern that none of the markets have observed significant entry of other generic products by competing pharmaceutical companies.” Aspen said the EU probe concerned several of its European subsidiaries, adding that it would work constructively with the commission. Pfizer US-based Pfizer is the only provider of its lung cancer treatment medication known as Xalkori Crizotinib in South Africa. Based on information available to the CompCom, it suspects Pfizer “has and continues to engage in excessive pricing conduct” in the drug’s provision, contravening the Competition Act. Its information suggests that lung cancer treatment is unaffordable in South Africa and medical aid schemes refuse to pay for the treatment. Information available to the ComCom suggests Xalkori Crizotinib costs approximately R152 000.00 for 250 mg when bought through an agent, Equity. It seems there was a price reduction to R72 000 per month for 250 mg subsequently – conduct is suggestive of abusive behaviour in the drug’s supply. Pfizer denies that it supplies the lung cancer product at the alleged price of R152 000. “We await the opportunity to be contacted by the commission to clarify the pricing for this product. We respect the process initiated by the commission and Pfizer shall fully cooperate with the authorities in their investigation.” Roche Roche told Moneyweb is has not yet received a formal notification by the Competition Commission in South Africa. “In the case where we receive a formal notification, we will be cooperating with the authorities, and will provide all required information and will respond to the allegation.” The CompCom states it has reason to believe Roche and its US-based biotechnology company, Genentech “have and continue to engage in excessive pricing, price discrimination and/or exclusionary conduct in the provision of breast cancer medicine in South Africa”. “Breast cancer is the leading form of cancer affecting women in South Africa. Medication known as Trastuzumab is recommended as an essential medicine by the World Health Organisation and is primarily used to treat breast cancer and some types of stomach cancer. “In South Africa, only Roche’s branded versions of Trastuzumab are available and are sold under the names Herceptin and Herclon. Genentech provides exclusive marketing rights to Roche for Trastuzumab in South Africa.” The commission says information in its possession confirms that breast cancer treatment is unaffordable in South Africa and many medical aid schemes refuse to pay the treatment based on cost. “As a result of exorbitant prices, most breast cancer patients in both the private and public sectors are unable to get treatment.” As such, it has grounds to suspect that Roche and Genentech may be charging excessive prices for breast cancer medicines, including Herceptin and Herclon, “to the detriment of consumers and in contravention of the Competition Act”. It adds that information available to it shows that Roche and Genentech charge its customers different prices for breast cancer medicines. “For example, in the private sector a 12-month course of Herceptin costs approximately R500 000, or more, if higher dosage is required. The Respondent offers substantially low prices for Herclon in the public sector. “The choice of restricting sales to a particular sector is a commercial choice by the patent holder, in this instance the Respondent. This conduct may amount to price discrimination in contravention of section 9(1) of the Competition Act.” According to GroundUp here, in February the Treatment Action Campaign organised a protest against Roche over the pricing of Trastuzumab. It handed over a memorandum to Roche demanding the price and that it stop cease litigation against competitors making generics. Roche’s Aadila Fakier signed and accepted the memorandum, saying the concerns were noted and Roche would engage with relevant stakeholders on this. Roche stated that it had been in negotiations with the Department of Health over the past year “to improve equitable access to Trastuzumab in the public sector. We have offered the Department of Health a significantly reduced and cost-effective treatment option….A final agreement has however not yet been concluded”. Comment has been sought from Pfizer but wasn’t received before time of publishing.
Created at 2017/06/22 11:54 AM by Mediclinic
Last modified at 2017/06/22 11:54 AM by Mediclinic