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Aspen faces EU probe over excessive pricing of cancer drugs

May 15 2017 13:37
Aoife White, Bloomberg News, with Fin24


Company Data

ASPEN PHARMACARE HOLDINGS LIMITED [JSE:APN]

Last traded 112
Change -1
% Change -1
Cumulative volume 1124763
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

Brussels - Aspen Pharmacare [JSE:APN] is being probed by European Union antitrust regulators who say it may have charged too much for cancer drugs.

It’s the first time the EU has targeted drugmakers for excessive pricing, following an Italian antitrust fine for Aspen last year.

"When the price of a drug suddenly goes up by several hundred percent, this is something the commission may look at," EU Competition Commissioner Margrethe Vestager said in an emailed statement on Monday.

The EU said it’s probing Aspen’s pricing practices for medicines using the active pharmaceutical ingredients chlorambucil, melphalan, mercaptopurine, tioguanine and busulfan. They are used to treat cancer and sold in different formulations and under multiple brand names. Aspen acquired them after initial patents expired.

Regulators said they’ll check that Aspen conducted "so-called price-gouging" by imposing price increases of up to several hundred percent. The EU says it’s been told Aspen threatened to withdraw medicines in some countries and "has actually done so in certain cases".

READ: Aspen in Competition Commission price-fixing probe

The probe covers all of the European economic area except Italy where regulators fined the company €5m  (about R66m) last year for raising prices on cancer drugs by as much as 1500% starting in 2014. That related to an anti-tumor drug package Aspen bought from GlaxoSmithKline, a former shareholder.

Aspen confirmed in a separate statement to shareholders that the European Commission has opened proceedings to investigate certain actions of Aspen Holdings and certain of its European subsidiaries.

Aspen said while it's not currently in a position to comment on these proceedings, it reaffirms its commitment to fair and open competition in markets in the European Union and around the world.

"Aspen takes compliance with competition laws very seriously and will work constructively with the European Commission in its process."

It advised shareholders to exercise care when reacting to information on the matter which was not released by Aspen Holdings.

ALSO READ: Aspen shares drop over report of secret plan to destroy cancer drugs

Aspen's share price dropped 2.51% to R278.40 by 13:09 on the JSE.

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