According to the Times, a top pharmaceutical company allegedly considered destroying its supply of cancer drugs to create shortages in an attempt to gain profit from price-hiking.
The report fingered the South African Aspen Pharmacare company as the guilty party. According to emails seen by the Times, the company aimed to trigger a price increase of up to 4,000 percent. Documents reviewed by the newspaper allegedly show that Aspen Pharmacare took an “aggressive” approach in negotiations with Spanish health care authorities and stopped direct supplies of five cancer drugs from May 2014. The withdrawal of these medications forced cancer patients to purchase from alternative sources at significantly higher prices. During this period the company had the cancer drugs meant to supply Spain in storage.
One of the company’s senior executive allegedly responded – after being asked what should be done with the stocks of drugs – that “the only options will be to donate or destroy this stock,” if Spain was not cooperative. Aspen Pharmacare also actively tried to hike the prices on its cancer drugs throughout Europe. The documents cited by the Times reportedly show that Aspen sought increases in several European countries' health sectors over what they had been previously paying since 2012.
In October 2013, the company threatened to halt the supply of the medicines in Italy, if the health authorities did not accept a price hike of 2,100 percent within three months. The Italian Competition Authority then accused Aspen Pharmacare of pulling the drug from the market to force the health sector's hand. Similarly, Germany, Greece and Belgium faced a shortage of the same cancer drugs produced by the company around the same time. Other emails perused by the Times detail staff discussions relating to making more money by selling cancer medicines earmarked for Italy to Spain.
The inflated price push commenced after Aspen Pharmacare bought the marketing rights to the “Cosmos” portfolio of oncology medicines from the British pharmaceutical giant GlaxoSmithKline in 2009, as part of a £273 million ($342 million) deal.
The portfolio included such drugs as mercaptopurine, a treatment for acute lymphoblastic leukemia which occurs in children; busulfan, also used by leukemia patients; and chlorambucil, used to treat blood cancer. The portfolio also has other medicines largely used by elderly cancer patients.
Times reported that the company also hiked the price of these drugs in the UK in 2013; increasing busulfan from £5.20 ($ 6.5) to £65.22 ($ 81.7) per pack and chlorambucil from £8.36 ($ 10.47) to £40.51 ($ 50.74).
Currently, a legal loophole allows companies to impose higher prices on medicines in the UK as long as an existing brand name of a drug is dropped. However, the government introduced new legislation last year that would allow it to impose lower drug prices in case it rules that the cost of a medicine is “excessive.”
In response to the Times report, Aspen Pharmacare issued a statement refusing to “comment on these public allegations.”