Competition Commission Launches Investigation into Manufacturers of Cancer Drugs

The Competition Commission of South Africa

Media

For immediate release

13 June 2017

MEDIA STATEMENT BY THE COMMISSIONER ON THE INVESTIGATION INTO MANUFACTURERS OF CANCER DRUGS

Good afternoon ladies and gentlemen of the media. As you may be aware, the Competition 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. We have called this press conference to announce a series of investigations we are initiating today in various drugs for cancer. The matter is of grave national importance.

ROCHE UNDER INVESTIGATION FOR EXCESSIVE PRICING OF CANCER MEDICINES

Therefore, the Commission has initiated an investigation against Roche Holding AG (Roche), relating to the provision of lifesaving breast cancer medicine in South Africa. The Commission has reason to believe that Roche and its USA-based biotechnology company, Genentech Inc. (Genentech) have and continue to engage in excessive pricing, price discrimination and/or exclusionary conduct in the provision of breast cancer medicine in South Africa.

Breast cancer is the leading form of cancer affecting women in South Africa. Medication known as Trastuzumab is recommended as an essential medicine by the World Health Organisation and is primarily used to treat breast cancer and some types of stomach cancer. In South Africa, only Roche’s branded versions of Trastuzumab are available and are sold under the names Herceptin and Herclon. Genentech provides exclusive marketing rights to Roche for Trastuzumab in South Africa.

Alleged Excessive Pricing

Information in possession of the Commission confirms that breast cancer treatment is unaffordable in South Africa and many medical aid schemes refuse to pay the treatment based on cost. For example, a 12-month course of Herceptin in the private sector costs over R500 000, or more, if a higher dosage is required. As a result of exorbitant prices, most breast cancer patients in both the private and public sectors are unable to get treatment.On this basis, the Commission has reasonable grounds to suspect that Roche and Genentech (both referred to as ‘the Respondent’ in this matter) may be charging excessive prices for breast cancer medicines, including Herceptin and Herclon, to the detriment of consumers and in contravention of the Competition Act.

Exclusionary Conduct

Civil society organisations such as Advocates for Breast Cancer, the Cancer Alliance, the Cancer Association of South Africa and SECTION27 have raised concerns that the Respondent charges exorbitant and excessive prices for breast cancer medicines in South Africa. These organisations attribute high breast cancer drug prices to, among other things, abuse of patent laws. Roche holds a composition patent for its Trastuzumab product, Herceptin, in South Africa which expires in 2020. Genentech, which provides exclusive marketing rights to Roche for the product, also holds a patent covering combinations of the drug and other chemotherapeutic agents which could block pre-clinical wok on a biosimilar product until 2033.

Information in possession of the Commission gives rise to a reasonable suspicion that the Respondent may be engaging in exclusionary conduct in order to prolong its hold on breast cancer drugs. In particular, the Respondent may be using the ‘ever-greening’ strategy to delay and/or prevent entry of generic alternative breast cancer drugs. Ever-greening is a process whereby a first generation patent, that is about to expire, undergoes a minor change in an attempt to be granted second generation patent protection.The Respondent may also be engaging in exclusionary conduct by using the ‘patent thicket’ strategy to delay and/or prevent entry of generic alternative breast cancer drugs. This strategy prevents the development of alternate versions of the original product by restricting the processes whereby a drug is produced.  It also limits the number of forms of the active ingredient that generic companies can make, thereby eliminating possible substitutable products.

Price Discrimination

Information available to the Commission shows that the Respondent charges its customers different prices for breast cancer medicines. For example, in the private sector a 12-month course of Herceptin costs approximately R500 000, or more, if higher dosage is required. The Respondent offers substantially low prices for Herclon in the public sector.

The Medicines Control Council does not register a particular medicine for use in one sector (e.g. private) and not in the other (e.g. public). The choice of restricting sales to a particular sector is a commercial choice by the patent holder, in this instance the Respondent. This conduct may amount to price discrimination in contravention of section 9(1) of the Competition Act.

INVESTIGATION AGAINST PFIZER INC FOR EXCESSIVE PRICING

Furthermore, we have also initiated an investigation against pharmaceutical giant, Pfizer Inc, for suspected excessive pricing of lung cancer medication in South Africa.

Pfizer, an American pharmaceutical firm with its headquarters in New York, develops and produces medicines and vaccines for a wide range of medical disciplines, including immunology, oncology, cardiology, diabetology/endocrinology and neurology. Of relevance to the Commission’s investigation is the company’s lung cancer treatment medication known as xalkori crizotinib. Pfizer is the only provider of xalkori crizotinib in the country. The Commission is in possession of information that gives rise to a reasonable suspicion that Pfizer has and continues to engage in excessive pricing conduct in the provision of xalkori crizotinib, in contravention of the Competition Act. The Commission is in possession of information that suggests that lung cancer treatment is unaffordable in South Africa and medical aid schemes refuse to pay for the treatment. The information available to the Commission is that xalkori crizotinib cost approximately R152 000.00 for 250 mg when bought through an agent, Equity (Pty) Ltd. Subsequent information suggests that there was a price reduction to R72 000.00 per month for 250 mg. This conduct is suggestive of abusive behaviour in respect of the supply of xalkori crizotinib in South Africa.

ASPEN AND ABUSE OF DOMINANCE INVESTIGATION

Further, the Commission has initiated an investigation against Aspen Pharmacare Holdings Ltd (Aspen) for suspected abuse of dominance by charging excessive prices in the provision of lifesaving cancer medicines in South Africa. The Commission is in possession of information that gives rise to a reasonable suspicion that Aspen has and continues to engage in the excessive pricing in the provision of certain cancer medicines in South Africa, namely:

  1. a) Leukeran (active ingredient chlorambucil) is a chemotherapy medication used to treat chronic lymphocytic leukemia, Hodgkin lymphoma, and non-Hodgkin lymphoma;
  2. b) Alkeran (active ingredient melphalan) is typically used to treat multiple myeloma (bone marrow cancer) and epithelial ovarian cancer; and
  3. c) Myleran (active ingredient busulfan) is used in pediatrics and adults as a conditioning agent prior to bone marrow transplantation, especially in chronic myelogenous leukemia (CML) and other leukemias, lymphomas, and myeloproliferative disorders.

The Commission is of the view that Aspen appears to be a dominant firm in the provision of the Leukeran, Alkeran and Myleran drugs in South Africa.

In terms of Myleran, Aspen appears to be the only supplier of a generic version of busulfan in tablet form. No other products containing the same active ingredient appears to have been registered by the Medicines Control Council (MCC).

Aspen’s Leukeran brand is listed as a generic and there does not seem to be a listing for an originator product in the country.

As with Leukeran, Aspen’s Alkeran brand (tablet and injection) is the only product listed locally which contains melphalan. The drug is offered in both tablet (generic) and injection (originator) dosage form. Aspen is currently under investigation by competition authorities in various European countries for alleged excessive pricing on, among other products, Leukeran, Alkeran and Myleran. The European Commission has also launched an investigation in the European Union.

Given that Aspen supplies similar products (i.e. Alkeran, Leukeran and Myleran) in South Africa, the Commission has reasonable grounds to suspect that Aspen may be engaging in similar conduct locally. 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 have observed significant entry of other generic products by competing pharmaceutical companies.  International background

The Italian Competition Authority recently found that Aspen abused its dominant position during negotiations with Italy’s drug regulator over the price of four cancer drugs (Leukeran, Alkeran, Purinethol and Tioguanine) which it had purchased from GlaxoSmithKline (GSK) in 2009. Aspen increased the cost of the un-substitutable and lifesaving cancer drugs by between 300% and 1 500%.

Similarly, in the UK and Spain, Aspen is alleged to have attempted to sell cancer medicines in Europe for up to 40 times their previous prices. Similar price increases were observed for Leukeran (also used by leukemia patients) and Alkeran. During price negotiations between Aspen and the Spanish health service in 2013, Aspen allegedly threatened to stop selling cancer drugs unless the health authority agreed to price increases of up to 4 000%.

On 15 May 2017, the European Commission opened a formal investigation into concerns that Aspen has engaged in excessive pricing. The investigation concerns Aspen’s pricing practices for niche medicines containing the active pharmaceutical ingredients chlorambucil, melphalan, mercaptopurine, tioguanine and busulfan.

Thank you.

[ENDS]

For more information.

 

Sipho Ngwema, Head of Communications

On behalf of: The Competition Commission of South Africa

Tel: 012 394 3493 / 078 048 1213 / 081 253 8889

Email: [email protected]

SA Health Minister Takes On The President – Bhekisisa

 

 

 

 

The Article and its contents belong Bhekisisa and the Mail and Gaurdian
Article Written by: MIA MALAN

 

How to defy Zuma – and survive to tell the tale

Health Minister Aaron Motsoaledi knows the political consequences of firing him weigh heavier than the repercussions of keeping him on in his position; that’s why he reportedly seconded a vote of no confidence against President Jacob Zuma this weekend, says political analyst Steven Friedman.

On Saturday a vote of no confidence is said to have been tabled by ANC NEC member Joel Netshitenzhe at the ANC’s national executive committee (NEC) meeting in Irene near Tshwane. Motsoaledi and his deputy Joe Phaahla apparently backed Netshitenzhe.

This would be the second time that Motsoaledi has supported such a motion. Zuma also faced a motion of no confidence in November, tabled by then tourism minister Derek Hanekom. Zuma dismissed Hanekom in a cabinet reshuffle in April , also removing Pravin Gordhan as finance minister.

“Everything in the ANC at the moment has to be understood in terms of the balance of power between the two rival factions – those who support Zuma and those who don’t,” says Friedman. “Clearly Motsoaledi’s reading, and that of his faction, is that there’s not going to be a second cabinet reshuffle anytime soon, and therefore if he wasn’t removed from the cabinet for taking this position the first time, there is no reason why he shouldn’t support such a motion a second time.”

Friedman says Motsoaledi’s strong SACP connections, as well as his “institutional base” in the ANC, makes it difficult for Zuma to act against him. Motsoaledi’s uncle Elias Motsoaledi was one of the eight men, including former President Nelson Mandela, sentenced to life imprisonment in the Rivonia trial in 1964.

Friedman explains: “If you fire Motsoaledi you’re actually declaring war on a faction, or an affiliate of the ANC, whereas Hanekom doesn’t have that kind of institutional base.

“So clearly Zuma took a decision that it was not in his interest to fire an SACP minister who quite clearly had substantial support. His reading of ANC politics was that he would be taking on too much, he would be inviting too much resistance; if he was getting rid of people like Motsoaledi as well.”

Health activists have been expressing “enormous respect” for Motsoaledi’s “bravery and courage” in his ongoing opposition to Zuma. Executive director of the social justice group  SECTION27 Mark Heywood says his organisation, as well as the HIV advocacy movement, the Treatment Action Campaign, believes the health minister acted “honourably” by seconding the motion.

Motsoaledi: What the NHI will mean for you – and your tax credits
Our Laura Lopez Gonzalez asks health minister Aaron Motsoaledi five questions about the National Health Insurance (NHI) and your medical aid.

The ANC had a press conference on Monday afternoon at its head offices to announce the outcome of the NEC meeting. Zuma survived with 18 NEC members supporting the motion and 54 being against it.

But Friedman says he’s not surprised: “The only time the ANC has asked a president to step down, which was [former president Thabo] Mbeki [in 2008], there was a huge majority [in the NEC] supporting it. We’re not there yet.

“All the motion may do, if it has any effect at all, is to give both sides a greater sense of who is on their side and who is on the other side. This they will use to continue to do the main thing they’re doing at the moment, which is to contest who will be running the ANC next year.”

This article was updated on June 3 to include the outcome of the ANC’s NEC meeting. The article was originally published before the meeting happened.

Rare Diseases South Africa – Annual Report 2017

Over the last few months, Rare Diseases SA has spent time revising their strategic focus.

Whilst we know that there are many challenges which affect the global rare disease population at large, we also have realized that there are many local challenges which need to be addressed.

In line with our mission of advocating and facilitating engagement between those with the ability to prevent, intervene, treat and provide supportive care for those impacted by rare diseases, the decision was made to invite all stakeholders to a meeting where we could engage on the various issues identified.

Invites were sent to organs of state, funders, fund administrators, healthcare professionals, support groups, industry partners and civil society.

Presentations by Kelly du Plessis (CEO of Rare Diseases SA), Dr Helen Malherbe (Chair of Genetic Alliance SA) and Nicole Capper (A functional pharmacist, Mrs South Africa finalist, and parent to a rare patient) were presented.

Many challenges exist in South Africa in terms of rare disease, but, there are also larger healthcare challenges which need to be taken into consideration when navigating the rare disease patient journey.

These include: 

  • Limited Financial resources regarding individual patient advocacy
  • Culture of apathy amongst South African healthcare consumers
  • Cultural, class, literacy diversity of South Africa
  • Patients lack of understanding on entitlement to rights
  • Accessibility of information
  • Escalation processes are cumbersome and ineffective
  • Supportive care is often the only possible intervention and is often not recognized as a medical need.
  • Treatment decisions are based on cost alone.

Poor lead times from diagnosis to treatment, inaccurate diagnosis, unregistered treatments continue to minimize access for patients.

 

Key problem challenges in South Africa

Over the last 4 years of operation, and particularly following the successful RareX conference last year, the following were identified as key problem areas which required urgent attention:

  • The need for a definitive definition of a “rare disease” within the SA context.
  • The need for big data in terms of the threat of rare diseases in South Africa, patient numbers, and treatment outcomes.
  • Guidelines and Clinical protocols are required for the effective treatment and management of rare diseases.
  • Rare diseases are underdiagnosed and underfunded in South Africa and existing resources are not employed to ensure maximum return on investment, efficiency or efficacy.
  • No existing culture of collaboration between stakeholders – focus of support groups is very singular and disease specific.
  • A comprehensive legislative and regulatory framework exists however, implementation has been fragmented and unsustained, particularly within the area of Rare Diseases.

 

The Q & A session provided for some very meaningful engagement.

Key take-home points were raised by members of the audience for discussion and consideration including:

  1. Newborn Screening and the need for discussion on how this could be carried out in a cost effective and ethical manner.
  2. Patient Registry: How could a registry be created which allows for raw data to be collected in a responsible manner without placing further strain of an under resourced community.
  3. Caregiver fatigue: implementing plans, and guidelines to not only recognize caregiver burnout, but to appropriately address the challenges faced in this regard.
  4. The health market inquiry: civil society engagement is critical to ensuring patient-centricity
  5. Collaboration: A joint effort between all stakeholders in required to ensure that the objectives are met.
  6. Medical training: specifically, on congenital disorders is lacking. Capacity building in this regard is urgently required.
  7. ICD 10/11 code revision: A call for collective comments, and inputs is required to ensure that rare diseases are included in the revised coding.

 

New strategic objectives

Rare Diseases SA has therefore decided on the following key focus areas for the next 5 years.

Patient navigation: Ensure a challenge-free, supported journey from presentation of symptoms to end-of-life for patients affected by rare diseases.

  1.  Develop clinical guidelines and referral pathways for identified rare diseases in South Africa.
  2. Provide referral services for both treatment and support to patients with rare diseases.
  3. Develop patient information/ educational material relating to: diseases, treatment, and supportive services.
  4. Provide case management services for patients requiring treatment.
  5. Provide tools and resource material to improve patient journey.

Advocacy and expanding access: Represent patients affected by rare diseases with regards to policy, healthcare costs and delivery.

  1. Create a united voice in the rare disease community.
  2. Contribute and participate in policy development and service delivery
  3. Monitor service delivery relating to rare diseases
  4. Facilitate development and maintenance of patient registries
  5. Civil society: incorporate principles included in rare disease patient charter in advocacy efforts

 

Community Engagement: Collaborate with civil society to ensure greater awareness and networking platforms for rare diseases in South Africa.

  1. Create awareness events and campaigns relating to rare diseases
  2. Develop and distribute educational material and campaigns for the public and targeted stakeholders.
  3. Develop and participate in civil society alliances with linkages to the rare disease patient journey

 

Whilst these objectives seem out of reach, we are confident that with the right support, and collaborative efforts amounts all stakeholders, that they are possible.

We look forward to engaging with you on how best we can improve the life’s of those impacted by rare diseases and continue towards our vision of a South Africa where those impacted by rare diseases access life-saving treatment and supportive care for improved quality of life. 

Kelly du Plessis
CEO of Rare Diseases SA