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]

Fix Patent Laws Second Advocacy Workshop

The SA NCD Alliance attended at the second Fix the Patent Laws training and advocacy workshop host by MSF South Africa in Johannesburg.

The meeting aimed to further the advocacy into South African patent la reforms taking partners from all areas of civil society and related fields. Over the two days advocacy work was further trained and plans put in place to lobby the South African government to reform patent laws. The lines of Nelson Mandela were ushered as a focal point, that everyone has the right to affordable medical treatment.

The South African system of patent granting is in dire need of reform, as cheaper generic medications are not making it into the market in part due to the antiquated and out of touch patent laws of ever-greening drugs.

The workshop was not all serious and a light hearted yet important lesson given to the participants. On how to protest and toy-toy in a truly South African way. Which resulted in banners and placards made and a march to hand over a memorandum to the UN High-Level Panel on access to medicines Ruth Dreifuss in Johannesburg despite a rainy and cold day.

View the memorandum here

 

Fix The Patent Laws Workshop – Mobilizing Action

Fix the Patent Laws (FTPL) leas partners Medecines Sans Frontiers held their first training workshop and civil society consulting meeting on July 24th-25th at the offices of Section 27 in Johannesburg.

The training workshop brought together civil society organisations and stakeholders to learn about patent law reform.  South African urgently needs to reform patent laws for medicines and technology so that patients can access treatment.

The participatory workshop brought an innovative group from different disciplines: law, activism, journalism and social media.  Engaging the attendees in each section of training and, finding out from each what medications or devices would they like to see patent law reformed on.

What does this mean to the average person? South Africa’s patent office has been ever greening patents on essential drugs. Meaning small changes are made and the patents reapplied for another 20 years. This means that drug company owning the patent get to keep prices high due to exclusivity. The consumer ultimately pays the price due to unaffordability and lack of a generic version. The price paid by patients is disability, suffering and death.

There are many aspects to fixing the patent laws and the most important and first step is public awareness. Knowing what and how this problem affects the patients suffering will help us to reform the patent laws.

The laws need to be changed and the path is clear yet it is evident that the process is going to take time. It has worked in India and the same fight and reform is needed here. Evidently, patent holders don’t want profits cut and will place a stiff fight. Yet, the need is great enough for those that will greatly welcome the change.

Thanks MSF, TAC and Section 27 for making this possible.  Join the movement at www.fixthepatentlaws.org

Fix The Patent Laws Workshop – Mobilizing Action

Fix the Patent Laws (FTPL) leas partners Medecines Sans Frontiers held their first training workshop and civil society consulting meeting on July 24th-25th at the offices of Section 27 in Johannesburg.

The training workshop brought together civil society organisations and stakeholders to learn about patent law reform.  South African urgently needs to reform patent laws for medicines and technology so that patients can access treatment.

The participatory workshop brought an innovative group from different disciplines: law, activism, journalism and social media.  Engaging the attendees in each section of training and, finding out from each what medications or devices would they like to see patent law reformed on.

What does this mean to the average person? South Africa’s patent office has been ever greening patents on essential drugs. Meaning small changes are made and the patents reapplied for another 20 years. This means that drug company owning the patent get to keep prices high due to exclusivity. The consumer ultimately pays the price due to unaffordability and lack of a generic version. The price paid by patients is disability, suffering and death.

There are many aspects to fixing the patent laws and the most important and first step is public awareness. Knowing what and how this problem affects the patients suffering will help us to reform the patent laws.

The laws need to be changed and the path is clear yet it is evident that the process is going to take time. It has worked in India and the same fight and reform is needed here. Evidently, patent holders don’t want profits cut and will place a stiff fight. Yet, the need is great enough for those that will greatly welcome the change.

Thanks MSF, TAC and Section 27 for making this possible.  Join the movement at www.fixthepatentlaws.org

Poor management blamed for bulk of drug stock outs

Health Minister Dr Aaron Motsoaledi has blamed manufacturers for shortages of medicines including HIV and tuberculosis drugs, but a civil society coalition has alleged 80%of stock outs are due to poor management.

Community members have also complained about medicine stock outs.
In the Stop the Stock Outs Project’s latest survey, more than 40 percent of health facilities reported having experienced a HIV, TB drug stock out: Joe Gqabi and Alfred Nzo districts, Eastern Cape; Bojanala District, North West; Nkangala and Gert Sibande districts, Mpumalanga; and Lejweleputswa and Fezile Dabi districts, Free State.
According to Motsoaledi, recent reports by Times Live and eNCA regarding alleged widespread drug shortages promoted the minister’s early return last week from the World Health Organisation’s on-going, annual World Health Assembly in Geneva.

At a Pretoria press conference yesterday, Motsoaledi widespread shortages of drugs including the country’s three-in-one antiretroviral (ARVs) fixed-dose combination (FDC).

“The FDC is our flagship programme and we do everything in our power to protect it,” Motsoaledi said in a statement. “To make sure that there are not problems in this very important programme, we even implemented the practice of a national buffer stock whereby 10 percent of all the FDCs we provide are strategically stockpiled with a service provider in a warehouse.”

Motsoaledi also added that the county source the combination ARV from three different suppliers to guard against supplier problems affecting supply.

“At no stage did we have a shortage of FDC in the country,” he added.

As of September 2015, about 119,000 patients had been started on the FDC.

One in five facilities have experienced stock outs

The department recently released a list of at least 40 medications  -(comment by Vicki Pinkney-Atkinson  many of these critical for the treatment of NCDs, morphine and mental health medication)– that were running short at provincial depots nationwide. The department attributed the bulk of shortages to supplier constrained and shortages of the pharmaceutical ingredients used to make the drugs.

Stock outs of medicines are indicative of a bigger problem related to the management and accountability in a health system”

Comprised of civil groups including Medicines Sans Frontières, the Treatment Action Campaign and the Southern African HIV Clinicians Society, the Stop Stock Outs Project (SSP) collects stock out reports from health workers and clinics nationwide.

The group recently surveyed more than 2,500 of the country’s 3,732 health facilities. According to the research to be presented at the upcoming SA AIDS Conference, one in five facilities reported experiencing an ARV or TB medication stock out.

According to a SSP statement released yesterday, management or logistical challenges between medicine depots and clinics caused 80% of stock outs.

However, the group noted that patients were turned away without any medication in only 20 percent of cases.

“Supply of medicine to clinics and hospitals is the basic pillar to any public health system and stock outs of medicines are indicative of a bigger problem related to the management and accountability in a health system,” said SSP’s Dr Karl Le Roux in the statement.

The findings show an improvement over the group’s previous survey in which about one in four facilities reported stock outs.

However, >40% of health facilities in seven districts reported at least one HIV and TB drug stock outs. These districts include the Eastern Cape’s Joe Gqabi and Alfred Nzo as well as the Free State’s Lejweleputswa and Fezile Dabi districts. – Health-e News

Do you know of a stock out?

Email the Department of Health

or Stop Stock Outs sms or What’s App 084.855.7867 or email
© 2015 Health-e. All Rights Reserved.