The European Commission announced that it has opened a formal investigation into concerns relating to Aspen Pharma’s pricing practices on 15 May 2017. The Commission is investigating whether Aspen abused its dominant position by charging excessive prices for five medicines used for cancer treatment, in breach of Article 102 of the Treaty on the Functioning of the European Union. Aspen acquired the relevant drugs from GlaxoSmithKline (GSK) in 2009 after their patent protection expired. Aspen is alleged to have imposed very significant and unjustified price increases for these “niche” products that are sold in low volumes. The Commission alleges that Aspen imposed such prices by threatening to withdraw these medicines in some Member States, and has actually done so on certain occasions.
The investigation covers all of the European Economic Area except Italy, where Aspen was already fined €5 million by the national competition authority in September 2016 for abusing its dominant position by charging unfair prices for four cancer medicines.
This is the Commission’s first investigation into excessive pricing in the pharmaceutical industry. Such cases are generally rare and, in recent years, competition authorities have tended to focus on agreements between patent owners and their generic rivals, who are accused of delaying the entry of cheaper drugs.3 However, there have been several recent cases in the UK where excessive pricing was at issue: the Competition and Markets Authority (CMA) (i) fined Pfizer and Flynn Pharma nearly £90 million for excessive pricing in relation to an epilepsy treatment drug in December 20164, (ii) in the same month provisionally found that Actavis had charged excessive prices to the NHS for hydrocortisone tablets and (iii) is currently investigating Concordia in relation to suspected excessive pricing in the supply of certain pharmaceutical products, including to the NHS. Whilst Competition Commissioner Margrethe Vestager has recently signalled that the Commission is considering scrutinising excessive drug pricing, she has, since the launch of the probe into Aspen, also sought to clarify that the competition agency’s role is not to be a price regulator.