Com­pa­nies probed for drug price fix­ing

Com­mis­sion to in­ves­ti­gate

The Star Early Edition - - BUSINESS REPORT - Them­be­lihle Mkhonza

THE COM­PE­TI­TION Com­mis­sion has launched an in­ves­ti­ga­tion into three ma­jor phar­ma­ceu­ti­cal com­pa­nies for al­legedly fix­ing the prices of can­cer med­i­ca­tion.

The com­mis­sion’s head, Tem­binkosi Bon­akele, said yes­ter­day the in­ves­ti­ga­tion fol­lowed sus­pected col­lu­sion by Aspen, Pfizer and Roche over the prices they were charg­ing for can­cer drugs.

Bon­akele said that, in some in­stances, they charged up to R500 000 or more for the med­i­ca­tion for 12 months.

“The com­mis­sion can con­firm that the can­cer treat­ment is un­af­ford­able in South Africa, and many med­i­cal schemes refuse to pay the treat­ment based on cost,” Bon­akele said.

The com­mis­sion said that Aspen and Pfizer were be­ing in­ves­ti­gated for al­legedly charg­ing ex­ces­sive prices for can­cer medicines, while Roche and its US-based biotech­nol­ogy arm, Ge­nen­tech, were sus­pected of fix­ing the prices of breast can­cer med­i­ca­tion, in­clud­ing Her­ceptin and Her­clon, in con­tra­ven­tion of the Com­pe­ti­tion Act.

Bon­akele said the ex­ces­sive pric­ing of lung and breast can­cer med­i­ca­tion had im­pacted neg­a­tively on peo­ple who could not af­ford them.

“As you may be aware, the Com­pe­ti­tion Com­mis­sion has iden­ti­fied the health­care sec­tor, and, in par­tic­u­lar, phar­ma­ceu­ti­cals, as a pri­or­ity sec­tor for its en­force­ment ef­forts, due to the likely nega­tive im­pact that the anti-com­pet­i­tive con­duct in that sec­tor would have on con­sumers in gen­eral and specif­i­cally the poor and the vul­ner­a­ble,” he said.

The agency said it had rea­son­able grounds for sus­pect­ing that Aspen abused its dom­i­nance in the mar­ket by charg­ing ex­ces­sive prices for can­cer med­i­ca­tions such as Leuk­eran, Alk­eran and Myleran. Aspen is not new to can­cer price-fix­ing probes.

Last month, the EU said it had opened a for­mal in­ves­ti­ga­tion against the com­pany for ex­ces­sive pric­ing con­cern­ing five life-sav­ing can­cer medicines.

The EU au­thor­i­ties also ac­cused Aspen of abus­ing its dom­i­nant mar­ket po­si­tion in breach of EU anti-trust rules.

Bon­akele said given that Aspen also supplied sim­i­lar prod­ucts in South Africa, the com­mis­sion had grounds to sus­pect that the in­ter­na­tional phar­ma­ceu­ti­cal gi­ant could be in­volved in sim­i­lar prac­tices lo­cally.

“More­over, Aspen ap­pears to be ei­ther the only sup­plier or at least a dom­i­nant sup­plier of th­ese prod­ucts in both the South African and the Euro­pean mar­kets,” Bon­akele said. “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.”

Con­cern­ing Pfizer, the com­mis­sion said it was in pos­ses­sion of in­for­ma­tion that sug­gested that the New York-based com­pany charged ex­ces­sive prices for lung can­cer med­i­ca­tion called Xalkori Cri­zo­tinib.

Bon­akele said Pfizer was the only provider of Xalkori Cri­zo­tinib in the coun­try.

“The in­for­ma­tion avail­able to the com­mis­sion is that Xalkori Cri­zo­tinib cost ap­prox­i­mately R152 000 for 250mg when bought through an agent, Eq­uity,” he said. “Sub­se­quent in­for­ma­tion sug­gests that there was a price re­duc­tion to R72 000 per month for 250mg. This con­duct is sug­ges­tive of abu­sive be­hav­iour in re­spect of the sup­ply of Xalkori Cri­zo­tinib in South Africa.”

Bon­akele said civil so­ci­ety or­gan­i­sa­tions such as Ad­vo­cates for Breast Can­cer, the Can­cer Al­liance, Can­cer As­so­ci­a­tion of South Africa and Sec­tion27 also com­plained about ex­ces­sive pric­ing, price dis­crim­i­na­tion and ex­clu­sion­ary con­duct in the pro­vi­sion of breast can­cer treat­ment in the coun­try.

Aspen yes­ter­day said it would co-op­er­ate with the in­ves­ti­ga­tion.

The com­pany said phar­ma­ceu­ti­cal prices in South Africa were ap­proved by the Depart­ment of Health in terms of the Sin­gle Exit Price reg­u­la­tory frame­work, which es­tab­lished a uni­ver­sal fixed price for each phar­ma­ceu­ti­cal prod­uct.

Tem­binkosi Bon­akele of the Com­pe­ti­tion Com­mis­sion yes­ter­day said it sus­pected col­lu­sion by Aspen, Pfizer and Roche over the prices they were charg­ing for can­cer drugs.

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