Aspen shares rise as DA pulls back demand for probe
The DA had asked the Competition Commission and the Medicines Control Council to investigate Aspen’s market conduct
Generic drug makers Aspen’s share price rose 2.01% to R298.60 on Tuesday on news of the DA retracting claims that it had been price gouging in SA.
In April, the DA asked the Competition Commission and the Medicines Control Council to investigate Aspen’s market conduct in SA, as it is being probed by regulators in Spain and the UK.
The drug maker also faces a price-hiking fine in Italy and a probe by the European Competition Commission. The Competition Commission said at the time that it had begun a preliminary investigation into the pharmaceutical sector.
On Tuesday, DA health spokesman Wilmot James said the party had subsequently met Aspen representatives and was assured the regulatory framework for medicine prices prevented Aspen from introducing excessive price hikes.
Private-sector medicine prices are controlled by the government, and increases are determined by the minister of health based on advice from the medicines pricing committee.
"As far as our investigation went, I think the opportunity is pretty slim for price gouging," said James. Aspen’s head of strategic trade Stavros Nicolaou said SA’s medicine pricing regulations meant it was impossible to price-gouge in SA.
Not only were private sector prices capped at the single exit price, but state tender prices could not go above this threshold either, he said.
The Competition Commission had not responded to a request for comment at the time of publication.
Aspen drew fire earlier in 2017 for failing to inform shareholders of the investigations in Spain and the UK and the €5m fine imposed by the Italian authorities for raising the prices of some drugs by up to 1,500%.
It did issue a Sens statement when the European Competition Commission announced on May 15 it would investigate whether Aspen was breaking EU competition rules by charging excessive prices for five cancer drugs. European Competition Commissioner Margrethe Vestager said: "Companies should be rewarded for producing these pharmaceuticals to ensure they keep making them into the future. But when the price of a drug suddenly goes up by several hundred percent, this is something the commission may look at."