EU launches probe into Aspen Pharma cancer drug pricing

European regulators have launched a formal investigation into Aspen Pharmacare over concerns that the South Africa company has been engaged in 'price gouging' over several of its life-saving cancer medicines.

The European Commission will investigate whether Aspen, South Africa's largest drug company and until last year a close partner of British drug group GlaxoSmithKline, has abused a dominant market position in breach of EU antitrust rules, imposing "very significant and unjustified price increases of up to several hundred percent, so-called 'price gouging'".

Aspen, having bought the rights to five life-saving cancer drugs from GSK in 2009, planned to hike up the price of some treatments by as much as 4,000% and even examined the possibility of destroying supplies of the life-saving drugs in order to drive the massive price rises, according a report in The Times.

The company's determination to ramp up prices discovered in a cache of documents that were passed to the newspaper after a row erupted in 2014 between Aspen, which runs its European business from an office in Dublin, and Spain's health service before then spreading to Italy.

With little or no competition for these drugs, Aspen ramped up the price of these drugs around Europe, according to the Times' research, with the price of busulfan, used by leukaemia patients, rose from £5.20 to £65.22 a pack in England and Wales during 2013, while chlorambucil rose from £8.36 to £40.51.

Having also now been passed these documents, the EU said it "has information that, for example, to impose such price increases, Aspen has threatened to withdraw the medicines in question in some Member States and has actually done so in certain cases".

On Monday, EC competition chief Margrethe Vestager acknowledged that companies should be rewarded for developing drugs that save or prolong lives, to ensure that they keep making them into the future.

"But when the price of a drug suddenly goes up by several hundred percent, this is something the Commission may look at," she said.

"More specifically, in this case we will be assessing whether Aspen is breaking EU competition rules by charging excessive prices for a number of medicines."

The EC investigation will examine Aspen's pricing practices for niche medicines containing the active pharmaceutical ingredients chlorambucil, melphalan, mercaptopurine, tioguanine and busulfan, which Aspen bought after their patent protection had expired and has sold under various brand names and in different combinations for treating cancer, such as hematologic tumours.

GSK sold the drugs as part of the 'Cosmos' portfolio in 2009, the same year it built up a 19% stake.

Last September Glaxo sold its last stake in Aspen, which in 2015 year had represented 12.4% of the South African company and was worth north of £10bn.