Competition Commission drops investigation into Aspen's alleged excessive pricing

In June, the commission said it was investigating Aspen for "suspected abuse of dominance by charging excessive prices in the provision of lifesaving cancer medicines in SA".

The motivation for an investigation into the South African pharmaceutical company appeared to be the fact that Aspen increased its cancer prices by between 300% and 1,500% in Italy, leading to a major investigation there.

The Competition Commission said at the time that it had "possession of information that Aspen had engaged in the same conduct" locally.

But what the Competition Commission failed to note was that drug price increases were set by the government every year and the prices and annual increases were publicly available.

The commission could have discovered the prices on websites such as this code4sa.org

At the time, Aspen said the drugs under investigation had increased, on average, 6.25% a year since 2009, when Aspen bought the drug portfolio from GSK.

For example, the drug used for leukaemia, Leukeran, costs between R2,800 and R4,800 a month per patient. Myleran, used for a blood cancer, costs an average of R2,086 a month.

However, it appears the Competition Commission did not know this before its statement accusing Aspen of suspected excessive pricing.

The commission also complained in June that Aspen was being dominant as it was the only firm selling these old blood cancer drugs. However, these drugs are not made by other companies owing to very limited demand for them due to their age.

On Wednesday, the commission backtracked and said: "Based on the information gathered to date, the commission has decided to drop the investigation against Aspen because an excessive pricing case cannot be sustained against them."

Aspen said it would not take any action against the commission and, in a Sens announcement, thanked commissioner Tembinkosi Bonakele for fast-tracking the investigation.

The Competition Commission will continue its investigation into Roche regarding the price of Herceptin, a breast cancer drug that reduces a specific form of breast cancer from returning by about 40%. The drug costs about R500,000 for a year's course. It is taken for a year only.

Roche has offered a much cheaper price to the public sector, although it is not yet available, which the commission is not happy about.

Genentech, the Herceptin drug distributor, has extended its 20-year patent on the drug by 13 years - to 2033 - which the commission is investigating. In the US and Europe, patents for Herceptin were only granted for 20 years.

The commission will continue to investigate Pfizer for the price of lung cancer drug crizotinib, which is not registered in SA but is imported here under special licence. It is no longer investigating the company that imports the drug for a handful of patients.

Aspen's share price was little changed in late afternoon trade on Wednesday, down 0.17%, or 52c, at R305.32.