Photo: Supplied
Photo: Supplied

Aspen Pharmacare commits to UK ex gratia payment of R147 million

By Sandile Mchunu Time of article published Aug 15, 2019

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INTERNATIONAL – Aspen Pharmacare's share price shed more than 8percent of its worth on the JSE yesterday.

This after the South African drug maker said it had made commitments with the UK Competition and Markets Authority (CMA) to pay an ex-gratia payment of £8m (R147 million) related to the supply of Fludrocortisone and Dexamethasone.

The group said the payment would be made to different institutions, with the UK secretaries of state for health and social care receiving £6.49m.

It said it would also pay £788000 to the Scottish ministers, £455200 to the Welsh and the departments of Health and Social Services, and £271200 to the Department of Public Safety for Northern Ireland.

The group said it had offered commitments to the CMA for the purposes of addressing the competition concerns arising from certain aspects of the CMA’s investigation.

Aspen said it admitted liability for entering into an agreement to acquire a potential competitor with the consequence that the conclusion of the agreement resulted in anti-competitive behaviour.

“The CMA has given notice that it proposes to accept the commitments,” the group said, adding that the giving of the commitments does not constitute an admission of any wrongdoing by Aspen with respect to the alleged anti-competitive conduct.

“In addition, the commitments remain subject to the CMA’s final approval,” the group added.

Aspen Pharmacare shares closed 6.66percent lower at R69.55 on the JSE yesterday.

The UK CMA opened an investigation into Aspen’s alleged anti-competitive conduct under Articles 101 and 102 of the Treaty on the Functioning of the EU in relation to the supply of Fludrocortisone acetate 0.1mg tablets and Dexamethasone 2mg tablets in the UK.

Aspen said CMA advised Aspen that it would not be proceeding with its investigation in relation to Dexamethasone.

Under the terms of the commitments, Aspen will dispose of its rights to Fludrocortisone in the UK to an independent third party overseen by the CMA and Aspen.

Aspen has been continuing with its strategy of exiting non-core assets after Mylan exercised its option to buy its portfolio for a maximum consideration of A$188m (R1.94billion) in May.

The group said it would use the proceeds to reduce its debt.

Aspen’s total debt was about R53.5bn by the end of December last year.


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