14/06/2017 07:24 SAST | Updated 14/06/2017 08:27 SAST

Big Pharma Under Investigation For Inflating Cancer Drug Prices

Three major pharmaceutical companies have said they will cooperate with the Competition Commission's investigation.

Waldo Swiegers/Bloomberg via Getty Images

The Competition Commission is investigating three large pharmaceutical companies for suspected excessive pricing of their drugs, Business Day reported on Wednesday.

The Competition Commission announced on Tuesday that it was investigating Africa's biggest generic drug maker, Aspen Pharmacare, and multinational pharmaceutical manufacturers Roche and Pfizer for alleged excessive pricing of their cancer medications.

Aspen is reportedly already under investigation by European authorities for the same offence.

Business Day reported that the companies could be fined a maximum penalty of 10% of annual turnover by the Competition Tribunal if found guilty.

Aspen is reportedly being investigating for allegations that it has abused its market dominance to charge excessive prices for medications used to treat leukaemia, bone marrow cancer and lymphoma. Roche is being investigated for allegedly excessively inflating its breast cancer drugs, which cost R500‚000 to R550‚000 per patient in the private sector for a 12-month treatment. The drug reportedly costs more than half that amount in state hospitals.

Pfizer is reportedly under investigation for the price of its lung cancer drug.

Commissioner Thembinkosi Bonakele said: "This investigation is crucial. It is a matter of national importance."

The European Competition Commission is investigating Aspen for huge increases in the price of cancer drugs, Business Day reported. Similar probes are under way in Spain and the United Kingdom.

Bonakele said there were "reasonable grounds" to suspect the company might be doing the same thing in South Africa.

"Moreover, Aspen appears to be either the only supplier or at least a dominant supplier of these products in both the South African and European markets. Given that Aspen's products are listed as generic products, it is of concern that none of the markets has observed significant entry of other generic products used by competing pharmaceutical companies," he said.

Aspen reportedly denied increasing the prices of its drugs outside of the Department of Health's regulations.

Roche is reportedly suspected of trying to prolong its patents on breast cancer medications to stop competition from generics. The discrepancy in the prices it charges for private and state hospitals could amount to price discrimination, the commission said.

Roche told Business Day it would cooperate with the authorities. Pfizer said the amount quoted by the commission, that it allegedly charges for a dose of its drug (R152 000) was incorrect that it awaited the opportunity to correct the commission. Pfizer also said it would cooperate with the commission.