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Companies probed for drug price fixing

Business Report
Johannesburg - The Competition Commission has launched an investigation into three major pharmaceutical companies for allegedly fixing the prices of cancer medication.

The commission’s head, Tembinkosi Bonakele, said on Tuesday the investigation followed suspected collusion by Aspen, Pfizer and Roche over the prices they were charging for cancer drugs.

Bonakele said that, in some instances, they charged up to R500 000 or more for the medication for 12 months.

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Picture: Chris Post/AP

“The commission can confirm that the cancer treatment is unaffordable in South Africa, and many medical schemes refuse to pay the treatment based on cost,” Bonakele said.

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The commission said that Aspen and Pfizer were being investigated for allegedly charging excessive prices for cancer medicines, while Roche and its US-based biotechnology arm, Genentech, were suspected of fixing the prices of breast cancer medication, including Herceptin and Herclon, in contravention of the Competition Act.

Bonakele said the excessive pricing of lung and breast cancer medication had impacted negatively on people who could not afford them.

“As you may be aware, the Competition Commission has identified the healthcare sector, and, in particular, pharmaceuticals, as a priority sector for its enforcement efforts, due to the likely negative impact that the anti-competitive conduct in that sector would have on consumers in general and specifically the poor and the vulnerable,” he said.

The agency said it had reasonable grounds for suspecting that Aspen abused its dominance in the market by charging excessive prices for cancer medications such as Leukeran, Alkeran and Myleran. Aspen is not new to cancer price-fixing probes.

Last month, the EU said it had opened a formal investigation against the company for excessive pricing concerning five life-saving cancer medicines.

The EU authorities also accused Aspen of abusing its dominant market position in breach of EU anti-trust rules.

Bonakele said given that Aspen also supplied similar products in South Africa, the commission had grounds to suspect that the international pharmaceutical giant could be involved in similar practices locally.

“Moreover, Aspen appears to be either the only supplier or at least a dominant supplier of these products in both the South African and the European markets,” Bonakele said. “Given that Aspen’s products are listed as generic products, it is of concern that none of the markets have observed significant entry of other generic products by competing pharmaceutical companies.”

Concerning Pfizer, the commission said it was in possession of information that suggested that the New York-based company charged excessive prices for lung cancer medication called Xalkori Crizotinib.

Bonakele said Pfizer was the only provider of Xalkori Crizotinib in the country.

“The information available to the commission is that Xalkori Crizotinib cost approximately R152 000 for 250mg when bought through an agent, Equity,” he said. “Subsequent information suggests that there was a price reduction to R72 000 per month for 250mg. This conduct is suggestive of abusive behaviour in respect of the supply of Xalkori Crizotinib in South Africa.”

Bonakele said civil society organisations such as Advocates for Breast Cancer, the Cancer Alliance, Cancer Association of South Africa and Section27 also complained about excessive pricing, price discrimination and exclusionary conduct in the provision of breast cancer treatment in the country.

Aspen yesterday said it would co-operate with the investigation.

The company said pharmaceutical prices in South Africa were approved by the Department of Health in terms of the Single Exit Price regulatory framework, which established a universal fixed price for each pharmaceutical product.

BUSINESS REPORT ONLINE 

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