Competition probe opened into alleged 'excessive pricing' of cancer drugs

The European Commission said it is concerned that Aspen Pharma's pricing of the medicines was "excessive". It has opened an investigation which will look at whether the company has abused a dominant market position with its pricing practices, in breach of EU competition rules.

It is the first time that the Commission has opened an investigation into concerns about excessive pricing practices in the pharmaceutical industry.

The Commission said its investigation will look specifically at the pricing practices relating to chlorambucil, melphalan, mercaptopurine, tioguanine and busulfan, which are sold under a number of brand names.

Information the Commission has indicates Aspen Pharma "imposed very significant and unjustified price increases of up to several hundred percent", in a practice known as 'price gouging', and that the company "has threatened to withdraw the medicines in question in some member states and has actually done so in certain cases".

Aspen Pharma said it is "commitment to fair and open competition in markets in the European Union and around the world".

"Aspen takes compliance with competition laws very seriously and will work constructively with the European Commission in its process," it said in a statement.

EU competition law does not bar businesses from holding a dominant position in the markets they operate in. However, under article 102 of the Treaty on the Functioning of the EU, businesses deemed to be dominant in a market are prohibited from abusing that position of power.

The Commission said: "In the EU, national authorities are free to adopt pricing rules for medicines and to decide on treatments they wish to reimburse under their social security systems. Each country has different pharmaceutical pricing and reimbursement policies, adapted to its own economic and health needs. The pricing of original medicines that are protected by patents is highly regulated."

"For off-patent medicines, member states may directly influence prices of generic entrants, but also encourage competition to achieve lower prices. As a result, prices generally fall significantly when a medicine goes off-patent. However, in the present investigation the Commission has indications of significant price increases for off-patent medicines," it said.

Aspen Pharma was fined €5 million last year by Italy's competition authority, which found the company "fixed unfair prices with increases up to 1500% for life-saving and irreplaceable drugs" used to treat patients with cancer.