Willemijn van der Wel January 16 2019 Small boost in battle against high prices for medicinal products AKD | Healthcare & Life Sciences - Netherlands Willemijn van der Wel Healthcare & Life Sciences Pharmaceutical compounding for a fair priceExclusivity on the European marketException under European lawEnforcement requestInvestigation resultsThe Amsterdam University Medical Centre (Amsterdam UMC) can legally continue its plans to make a pharmacy preparation of a drug to combat the rare and severe metabolic disease cerebrotendineous xanthomatosis (CTX). In 2018 the Health and Youth Care Inspectorate began an investigation into the quality and permissibility of Amsterdam UMC's pharmaceutical compounding of its CTX drug, which contained the active substance chenodeoxycholic acid (CDCA). On 28 November 2018 the inspectorate published its report.Pharmaceutical compounding for a fair priceLeadiant Biosciences is the sole manufacturer of CDCA. However, in April 2018 Amsterdam UMC began to manufacture its own CDCA for an affordable price via pharmaceutical compounding (in cooperation with healthcare insurers). In doing so, Amsterdam UMC entered into a battle with Leadiant, which lodged an enforcement request.Exclusivity on the European marketEarly in 2018 Leadiant was able to raise the price of CDCA to an unreasonably high level. CDCA was originally developed as a remedy for gallstones and put on the market at a reasonable price. Despite this, Leadiant could raise the price of its own CDCA medicinal product by taking advantage of the coincidental suitability of CDCA in the treatment of CTX.In past years, Leadiant bought the marketing authorisations of all alternative medicinal products containing the active substance CDCA. Further, Leadiant began to withdraw these alternative CDCA products from the market, until only one CDCA medicinal product remained. Due to the suitability of the medicine in the treatment of the orphan disease CTX – and the fact that Leadiant was the sole manufacturer – it was able to officially register its CDCA medicinal product as an orphan medicinal product in Europe. Orphan medicinal products in Europe are medicinal products that have been granted a European orphan designation according to EU Regulation 141/2000, giving the manufacturer of the product 10 years of market exclusivity in Europe. This allowed Leadiant to raise the price of the only available CDCA medicinal product, a highly controversial move.Exception under European lawAmsterdam UMC's aim was to make CDCA available for the 55 CTX patients in the Netherlands at a fair price. According to European law, a marketing authorisation is necessary for this kind of conduct.(1) However, because of Leadiant's European market exclusivity, Amsterdam UMC could no longer obtain the necessary marketing authorisation to do so.However, under certain conditions the pharmaceutical compounding of a drug without the necessary marketing authorisation is allowed under European and Dutch law.(2) This exception applies to the small-scale preparation of medicinal products in a pharmacy intended for the delivery to patients in the pharmacy on the orders of a pharmacist.Enforcement requestLeadiant's enforcement request was based on its complaint that Amsterdam UMC had violated the European regulations relating to medicinal products. Allegedly, this unlawful conduct by Amsterdam UMC constituted unfair competition. As a result of the enforcement request, the inspectorate started an investigation into the quality and permissibility of the pharmaceutical compounding of the drug by Amsterdam UMC.The first tests showed that the raw material used in Amsterdam UMC's drug contained a higher level of impurities than legally permitted. Consequently, Amsterdam UMC stopped the pharmaceutical preparation of CDCA and recalled the already delivered medicinal products.Investigation resultsIn November 2018 the inspectorate published its final decision on Leadiant's enforcement request, rejecting most of Leadiant's complaints. According to the inspectorate, the small-scale preparation of CDCA on prescription by Amsterdam UMC is legally allowed based on the abovementioned exception under European and Dutch law. However, due to the drug's impurities, Amsterdam UMC received a a written warning against its current drug and against advertising the production of CDCA for patients.Leadiant expressed its disappointment about the inspectorate's decision in a written reaction. Leadiant claimed that the decision undermines the orphan drug system, which might be true from the industry's perspective. However, in the public's view, the intense raising of the prices of orphan drugs is a dubious market practice. It is expected that there will be future initiatives producing affordable medicines to combat the high prices of orphan drugs.For further information on this topic please contact Willemijn van der Wel at AKD by telephone (+31 88 253 50 00) or email ([email protected]). The AKD website can be accessed at www.akd.nl.Endnotes(1) Article 40 of EU Directive 2001/83/EC.(2) Article 3 paragraphs 1 and 2 of EU Directive 2001/83/EC and Article 18 paragraph 5 and Article 40 paragraph 3 of the Dutch Medicines Act.