Drug Giant Aspen Pharmacare Plotted to Destroy Cancer Medicine to Jack Up Prices
April 14, 2017
By Alex Keown, BioSpace.com Breaking News Staff
DUBLIN, Ireland – Aspen Pharmacare, a South Africa-based company with European headquarters in Ireland, had discussions to destroy supplies of cancer drugs it acquired from GlaxoSmithKline in order to drive up prices.
According to a report in The Times of London, destroying a portion of Aspen’s supplies would drive prices up about significantly. As an example, one drug, busulfan used by leukemia patients, saw a price increase of £5.20 to £65.22, an increase of 1,100 percent. The drug is more than 60 years old, but doesn’t have any competition. The price hike, which happened in January, was reminiscent of Turing Pharmaceuticals’ 2015 5,000 percent hike for Daraprim in the United States. Another Aspen product, blood cancer drug chlorambucil, saw an increase from £8.36 to £40.51, The Times said.
Aspen acquired the drugs from GSK in 2009 as part of a $300 million deal. The “Cosmos” portfolio, as it was known, was past its patent expiration, but had no competition from other manufacturers. The company was exploring a pricing loophole that allowed companies to increase prices if an existing brand name is dropped. “Branded medicines are subject to strict price controls, but the Department of Health does not limit the price of unbranded generics,” The Times said.
It wasn’t just in England that Aspen sought to exploit pricing laws. The company also took a similar approach in Spain and Italy. According to the report, Aspen told the Italian government it would stop supplying medicines to that country if authorities did not agree to a 2,100 percent price increase within a three month period.
In Spain, the company stopped direct supplies of five cancer drugs in May 2014, which caused patients to seek foreign drugs that had a much higher price point.
According to internal emails obtained by The Times in 2014, a senior Aspen official told a colleague that the drugs would be destroyed if the Spanish health ministry did not agree to its pricing demands. Aspens decisions led to drug shortages in both Spain and Italy. Pharmacists in those countries were unable to provide needed medications to cancer patients. Shortages were also reported in Germany, Greece and Belgium during the same time period.
Aspen Chief Executive Officer Dennis Dencher told the publication that the prices before the increases were at a “very low and unsustainable base.” The price increases the company pursued were at levels appropriate to promote long-term sustainable supply to patients.” Shortages of the cancer medicines were not deliberate, Dencher said. He added that the company invested £55 million to construct a new manufacturing facility in South Africa.
GSK told The Times that since it sold the drugs to Aspen it no longer had involvement with pricing. As part of its sales agreement with Aspen, GSK obtained a 16 percent stake in the South African company. However, GSK has since sold that stake for about $2.2 billion.
Shares of Aspen, sold on Africa’s Johannesburg Stock Exchange, are up slightly this morning.