Africa’s biggest generic drug maker Aspen Pharmacare, already under investigation by European authorities over the price of its cancer drugs, is now under similar scrutiny from SA’s Competition Commission.
On Tuesday, the commission announced it was investigating Aspen and multinational pharmaceutical manufacturers Roche and Pfizer for suspected excessive pricing of their cancer drugs.
If the Competition Commission’s investigation uncovers abuses, the matter will be referred to the Competition Tribunal for prosecution. The maximum penalty the tribunal can levy is 10% of annual turnover.
Aspen is being investigated for allegedly abusing its dominant market position to charge excessive prices for three cancer drugs — Alkeran, Leukeran and Myleran — which are used for treating leukemia, bone marrow cancer and lymphoma.
Roche is in the cross-hairs for the price of its breast cancer drugs Herceptin and Herclon, while Pfizer is to be scrutinised for the price of its lung cancer medicine Xalkori.
“This investigation is crucial. It is a matter of national importance,” said commissioner Thembinkosi Bonakele.
Aspen is being investigated by the European Competition Commission for steep rises in the price of five off-patent cancer drugs it bought from GlaxoSmithKline several years ago.
It also faces probes by competition regulators in Spain and the UK, and is appealing against a price-hiking fine in Italy.
“Given that Aspen supplies similar products in SA, the commission has reasonable grounds to suspect Aspen may be engaging in similar conduct locally,” Bonakele said.
“Moreover, Aspen appears to be either the only supplier or at least a dominant supplier of these products in both the South African and European markets.
“Given that Aspen’s products are listed as generic products, it is of concern that none of the markets has observed significant entry of other generic products by competing pharmaceutical companies,” he said.
Aspen investors appeared unperturbed by Tuesday’s developments and its share price closed flat at R275.
“I think Aspen is very confident that in SA, they didn’t do anything with respect to price-gouging,” said Aeon Investment Management’s chief investment officer, Asief Mohamed.
Aspen said it had not increased the price of any of its products outside the regulatory framework approved by the Department of Health, which sets a maximum price for medicines sold in the private sector and controls annual price increases.
The commission believed Roche was using an “ever-greening” strategy to prolong the patents it held on its breast cancer drugs to delay competition from generic alternatives, Bonakele said. Roche charged different prices to state and private-sector patients, which may amount to price discrimination, in contravention of the Competition Act, he said.
Roche’s Aadila Fakier said Roche had yet to be formally notified of the Competition Commission’s investigation, but would co-operate with the authorities and provide any information required.
The commission said Pfizer’s Xalkori had initially cost R152,000 for 250mg and had then dropped to less than half that amount.
Pfizer SA country manager Jennifer Power said the R152,000 price quoted by the commission was wrong.
“We await the opportunity to be contacted by the commission to clarify the pricing for this product. We respect the process initiated by the commission and Pfizer shall fully co-operate with the authorities,” she said.