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First excessive pricing investigation on the pharma sector

European Commission headquarter

The European Commission (EC) opens formal investigation into Aspen Pharma’s pricing practices for cancer medicines.

The formal investigation address concerns that Aspen Pharma has engaged in excessive pricing concerning five life-saving cancer medicines. The Commission will investigate whether Aspen has abused a dominant market position in breach of EU antitrust rules.

“When we get sick, we may depend on specific drugs to save or prolong our lives. Companies should be rewarded for producing these pharmaceuticals to ensure that 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. More specifically, in this case we will be assessing whether Aspen is breaking EU competition rules by charging excessive prices for a number of medicines,” said Margrethe Vestager, in charge of competition policy.

The medicines under scruitiny contain the active pharmaceutical ingredients chlorambucil, melphalan, mercaptopurine, tioguanine and busulfan and they are used for treating cancer, such as hematologic tumors. They are sold with different formulations and under multiple brand names. Aspen acquired these medicines after their patent protection had expired.

The EC will now investigate information indicating that Aspen has imposed very significant and unjustified price increases of up to several hundred percent, so-called ‘price gouging’. The Commission has information that, for example, to impose such price increases, Aspen has threatened to withdraw the medicines in question in some Member States and has actually done so in certain cases. Aspen’s behavior may be in breach of the EU’s antitrust rules (Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the European Economic Area (EEA) Agreement), which forbid the imposition of unfair prices or unfair trading conditions on customers. The investigation covers all of the EEA except Italy, where the Italian competition authority already adopted an infringement decision against Aspen on 29 September 2016. This is the Commission’s first investigation into concerns about excessive pricing practices in the pharmaceutical industry.