In May 2017, the European Commission announced a formal investigation into Aspen's pricing practices regarding six critical, off-patent, cancer medicines. After acquiring the cancer medicines from another company, in 2012 Aspen started to progressively increase its prices, often by several hundred percent, in all countries in Europe where it sold the medicines.
Echoing similar excessive pricing investigations by the UK's Competition and Markets Authority, the Commission identified that Aspen had "consistently earned very high profits from its sales of these medicines in Europe, both in absolute terms and when compared to the profit levels of similar companies in the industry. Aspen's prices exceeded its relevant costs by almost three hundred percent on average, including when accounting for a reasonable rate of return, although differences did exist between products and countries".
The Commission has stated that its "investigation did not reveal any legitimate reason for Aspen's very high profit levels", especially in light of the fact that Aspen's medicines have been off-patent for 50 years. The Commission also undertook analysis against several benchmarks, looking at Aspen's profits before and after the price increases and the profit levels of similar companies in the industry.
This is not the first time that Aspen's pricing practices have been under scrutiny. In 2016, the Italian Antitrust Authority fined Aspen 5 million euros for abusing its dominant position by introducing price increases of up to 1,500%.
Aspen has sought to address the Commission's concerns by proposing a set of commitments to reduce its prices, which were consulted on in July 2020. On 10 February 2021, following adjustments made to the original commitments, the Commission announced that it has formally agreed to accept the commitments on the basis that they offer "a fast, comprehensive and lasting solution to the competition concerns it had identified".
Aspen's commitments provide that:
- Aspen will reduce its prices across Europe for the six cancer medicines by, on average, approximately 73%, which is on average below the prices of 2012, before Aspen's price increases started;
- The reduced prices will be the maximum that Aspen can charge for the coming 10 years. They will take effect retrospectively, as of 1 October 2019; and
- Aspen guarantees the supply of the medicines for the next five years, and, for an additional five-year period, will either continue to supply or make its marketing authorisation available to other suppliers.
The commitments will remain in force for ten years. Under the supervision of the Commission, a trustee will be appointed to monitor Aspen's implementation of and compliance with the commitments.
By offering the commitments, Aspen will no doubt have been seeking to avoid a fine by the Commission. In a similar way to the UK's CMA's negotiation of compensation back to the NHS as part of its agreement to close a pharma excessive pricing case, the Commission is also seeking a retroactive price reduction that will apply from 1 October 2019.
However, the Commission's analysis shows that prices started to increase from 2013, reaching a peak in 2017. Therefore, an approximately eight-year period of potential overcharges paid by the EU's national health authorities remains unaccounted for. Given the pressure on national health authorities, Aspen is very likely to see further compensation claims from the relevant health authorities being pursued in the national courts.