European Commission seeks feedback on commitments offered by Aspen as part of excessive pricing investigation

The European Commission (“the Commission”) has launched a public consultation inviting comments from all interested parties on the commitments offered by Aspen in response to concerns expressed by the Commission over excessive prices applied by the company since 2012 on some cancer drugs.

On May 15, 2017, the Commission opened a formal investigation into a possible abuse by Aspen of its dominant position in numerous national markets—including Estonia, Germany, Latvia, Lithuania, Poland, Sweden and the United Kingdom, among others—by setting and maintaining excessive prices on six critical cancer drugs. Aspen’s conduct may be in breach of Article 102 of the Treaty on the Functioning of the European Union (“TFEU”), which expressly prohibits imposing unfair prices or other unfair trading conditions.

Aspen’s practices concern a number of drugs mainly used to treat leukemia and other hematological cancers that are sold under the Alkeran, Leukeran and Purinethol brand names. The Commission’s investigation, which analyzed Aspen’s cost structure for manufacturing and marketing those drugs, shows that since 2012, the prices of these drugs were up to 300% above production costs.

The Commission holds that, to maintain such high prices, Aspen took advantage of the fact that in most Member States there were no substitutive drugs available. The Commission also accuses Aspen of having threatened to remove the drugs from national lists of reimbursable medicines or even withdraw them from normal supply in the market in response to the national health care authorities’ objection to the continuous price hikes.

“Pharmaceutical companies often bring innovative medicines to the market and they should be rewarded for that. However, they sometimes also use their dominant position to increase prices of old but critical medicines by several hundred percent without any real justification. The Commission has concerns that Aspen’s conduct in this case amounts to excessive pricing by a dominant firm, which is prohibited by EU competition rules. […] We now reach out to the stakeholders to hear their views on whether the commitments adequately address our concerns and benefit patients and health budgets across Europe.” Margrethe Vestager, vicepresidente ejecutiva de la Comisión. Source: Comisión Europea (press release)

The commitments proposed by Aspen

Aspen has essentially proposed the following three commitments:

1. Price reduction. As stated, Aspen will reduce the prices of the six medicines by approximately 73% on average in all the Member States where they are marketed. This means the price of some of these drugs will be at levels lower than 2012:

2. Maintenance of a price ceiling. These new prices will be the maximum that Aspen can charge for the coming ten years. Moreover, the new prices will also apply retroactively from October 2019 (when Aspen presented the commitments) through a reimbursement system.

It also envisages the possibility that, after the first five years, Aspen may review those price ceilings provided that the costs associated with manufacturing the six drugs in question had increased significantly (by at least 20%).

3. Guaranteed long-term supply. Finally, Aspen guarantees the supply of the drugs for the next five years (2020-2024) in all Member States (except Italy) where Aspen markets them. With regard to the 2025-2029 period, Aspen may either continue to supply or make its marketing authorization available to other suppliers.

If, after the current public consultation, the Commission concludes that the commitments proposed by Aspen are sufficient and appropriate, it will adopt a decision making the commitments legally binding for the company. It is important to highlight that, if the investigation is closed with commitments, the Commission will not formally declare a breach of the European antitrust rules (specifically Article 102 of the TFEU).

Interested parties have two months from the publication of the commitments offered by Aspen in the Official Journal of the European Union, which took place on July 15, to submit comments. That period will therefore end on September 15, 2020.

Click here for the Commission’s press release.