Aspen and Equity probes halt in the clear
Competition Commission narrows focus to three pharmaceutical firms in its investigation of cancer-drug prices
The Competition Commission has abandoned its investigation into excessive pricing of certain cancer drugs sold by Aspen Pharmacare and Equity Pharmaceutical because the volumes involved are so low.
In June, the commission announced that it had initiated investigations into a number of pharmaceutical companies “for suspected abuse of dominance and excessive pricing in the provision of specific cancer medicines in SA”.
Roche, Genentech and Pfizer were also part of the investigation into excessive pricing. The commission is continuing to investigate complaints against Roche, Genentech and Pfizer.
On Tuesday, the commission said: “Based on the information gathered to date, the commission has decided to drop the investigation against Aspen and Equity because an excessive pricing case cannot be sustained against them.”
Sipho Ngwema, head of communications at the commission, disputed the charge that the June announcement was inappropriately rushed.
“We were faced with high prices that we believed had to be investigated in order to get to the facts.
“We discovered at a very early stage [of the investigation] the volumes were too low to even do an excessive pricing investigation,” said Ngwema.
He said instituting an investigation did not assume guilt. “It can also be to absolve a party,” Ngwema said.
Aspen welcomed the decision to drop the investigation. Stephen Saad, group CEO thanked the commissioner, Tembinkosi Bonakele, and the investigating team “for the expeditious and co-operative manner in which the investigation was undertaken”.
The Aspen share price was not affected by the announcement and was little changed at the close at R304.75 on Wednesday. Alec Abraham, senior analyst at Sasfin Bank, said that the share price did not respond because most investors assumed nothing would come of the investigation.
In June, Aspen issued a statement responding to the commission’s announcement, saying that while it fully acknowledged the vital nature of the cancer drugs being investigated, “these products have a collective turnover of about R3m in the South African private market”.
The commission’s decision to investigate followed news that in May, the European Commission had launched a Europe-wide investigation into alleged price hiking of critical cancer drugs by Aspen.
At the time, Aspen said it could not comment on the EU Commission’s action, but stressed it was committed to “fair and open competition in markets in the EU and around the world”.
News of the EU’s move followed investigations in Spain, the UK and Italy.