Wednesday February 10, 2021
For six cancer drugs
EU forces pharmaceutical company to cut prices
The pharmaceutical company Aspen has been increasing the prices for six special cancer drugs since 2012. Until the company earns an average of three times as much from the drugs as it spends on them. The EU sees this as an abuse of Aspen's market power and is reversing the price spiral.
The EU Commission has ordered the South African pharmaceutical company Aspen to drastically reduce its prices for six cancer drugs. The company is demanding "excessive" money for certain drugs for the treatment of leukemia and other blood cancers, said Margrethe Vestager, the EU Commissioner responsible for competition. "Patients, including small children, are dependent on these drugs."
According to the EU Commission, Aspen had acquired the rights to manufacture the off-patent drugs and began in 2012 to gradually increase prices – "often by several hundred percent". In 2017, Brussels launched an investigation which revealed "that Aspen was consistently making very high profits from the sale of these drugs in Europe after the price increases".
The prices therefore exceeded the relevant costs by almost three hundred percent on average. There are no “legitimate reasons” for this profit margin, especially since the drugs have been patent-free for 50 years. "Aspen was able to achieve these price increases because patients and doctors mostly had no alternatives to the use of these specific cancer drugs," the commission said. In some cases, the company even met criticism of its pricing policy with the threat of withdrawing from the supply.
Violations are subject to high fines
In negotiations with Brussels, Aspen finally agreed to a number of conditions. The prices of the six drugs will be reduced by an average of 73 percent and thus to the 2012 level. The new prices apply retrospectively from October 1, 2019 for ten years.
Aspen has also pledged to supply Europe with medicines for at least the next five years, the commission said. If the company then withdraws from supplying Europe, it will cede the corresponding approval to another company.
If the agreement is violated, Aspen faces a fine of up to ten percent of its annual sales. According to its own information, the Commission could impose this penalty directly and without further investigation.
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