Aspen slashes prices after European fair price probe

ASPEN Pharmacare yesterday said it had made commitments to the European Commission, which included cutting its prices by an average of 73 percent a product in the European Economic Area (EEA), excluding Italy.

The drug maker made the offer after the European Commission opened an investigation into Aspen in 2017 following concerns that Aspen might have abused its dominant position by imposing unfair prices in accordance to Article 102(a) Treaty on the Functioning of the European Union and Article 54 of the European Economic Area Agreement.

The commission conducted an investigation in respect of chlorambucil, melphalan, mercaptopurine, thioguanine and busulfan sold in EEA. The products generated €28 million (R532m) in revenue for the financial year to end June 2020 in the EEA.

However, Aspen said it disagreed with the commission’s preliminary assessment, but in order to meet the commission’s competition concerns, the group has proposed commitments, which included reducing the average price per product across the EEA of between 27 and 79 percent, by an overall average of 73 percent.

The group said it had undertaken to maintain such reduced prices for ten years and guarantee supply for at least five years.

“After five years, should Aspen wish to cease commercialising any of the products it will make them available for sale to a third party, or absent an interested purchaser, maintain the marketing authorisations,” the group said.

The group would make a onetime payment to the relevant entities responsible for reimbursement of medicines and other beneficiaries as appropriate to bridge the implementation of the price reductions.

The group said the commission had responded positively to the proposed commitments, which it intended to accept, subject to market testing.

“Market testing will allow interested third parties to submit their observations on the proposed commitments to the commission within the next two months,” the group said. The proposed commitments would become binding upon Aspen if the result of the market testing was favourable.

Aspen would continue to co-operate with the commission to prioritise patient needs and was focused on ensuring supply and access to affordable pharmaceuticals.

Aspen shares closed 2.64 percent lower at R142.55 on the JSE yesterday.