- South African regulators are looking into the pricing practices of three big drugmakers relating to a handful of their cancer medications.
- On Tuesday, the country's Competition Commission, tasked with, among other things, investigating when companies take advantage of their dominant places in the market, issued a statement indicating it had opened probes targeting Pfizer, Roche and the largest generic pharmaceutical developer in Africa, Aspen Pharmacare, for "suspected excessive pricing" of five oncology products.
- The products under consideration are Roche's breast cancer treatment Herceptin (trastuzumab), Pfizer's lung cancer drug Xalkori (crizotinib), and Aspen's copycat forms of Leukeran (chlorambucil), Alkeran (melphalan) — both approved for multiple types of cancers — and Myleran (busulfan), indicated as a preparatory agent for leukemia patients about to receive stem cell transplants.
Government regulators the world over have been looking deeper into how drugmakers price their products and the legality of those decisions.
In November, for instance, reports surfaced that the U.S. Department of Justice (DOJ) was in the process of a roughly two-years long antitrust investigation of generic drugmakers that were suspected of price collusion. And just last month, Johnson & Johnson revealed the DOJ also launched another probe into the big pharma's pricing decisions.
But the crackdowns haven't just been stateside. European regulators in May said they were investigating Aspen for price hikes to five chemotherapy drugs.
Pfizer and Roche are no strangers to watchdog inquiries either. The U.K.'s Competition and Markets Authority fined Pfizer £10,000 (about $12,800) last year for "unfair" pricing of the epilepsy drug Epanutin (phenytoin sodium). Less than a year later, Indian regulators opened an investigation seeking to address whether Roche had tried to sway the Drug Controller General of India to keep generic versions of Herceptin off the market.
In this latest South African probe, the commission underscored the devastating effects price gouging would have on the countries cancer patients. Trastuzumab and chlorambucil are both included on the World Health Organization's list of essential medicines.
"Breast cancer treatment is unaffordable in South Africa and many medical aid schemes refuse to pay for the treatment based on cost," the regulators noted in the statement dated June 13, adding that a 12-month regimen of Herceptin in the private sector clocks in at more than 500,000 South African rands, or about $40,000. "As a result of exorbitant prices, most breast cancer patients in both the private and public sectors are unable to get treatment."
The commission highlighted similar problems with Xalkori, which it said can cost R152,000 ($12,000) for a 250 mg dose of the drug. However, Pfizer has significantly lowered that price in the past, down to R72,000 ($5,700) per month for the same dose. "This conduct is suggestive of abusive behaviour in respect of the supply of Xalkori crizotinib in South Africa."
Regulators also called out Aspen for excessive pricing of Leukeran, Alkeran and Myleran, particularly because they couldn't find any other local sellers of those medications.
Whether the probe leads to any formal charges, it appears the South African doesn't plan on reducing oversight for the pharma industry any time soon.
"The 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 anti-competitive conduct in that sector would have on consumers in general and specifically the poor and vulnerable,” Commissioner Tembinkosi Bonakele said in the statement.