Italy fines Leadiant EUR3.5 million for charging excessive prices for an orphan drug

On 31 May 2022, the Italian Competition Authority (ICA) revealed its determination sanctioning the pharmaceutical firm Leadiant EUR3.5 million for charging excessive prices for the sale of an orphan drug.

The ICA discovered that Leadiant abused its dominant place available in the market for medicine containing chenodeoxycholic acid (CDCA). CDCA is the energetic ingredient in medicine used for treating the uncommon metabolic dysfunction cerebrotendinous xanthomatosis (CTX). In qualifying the infringement as very severe, the ICA took account of the life-saving nature of the drug and its value to the Italian National Health Service (INHS), which it famous had restricted sources.

According to the ICA’s determination, Leadiant has charged the INHS excessive prices for the sale of its CDCA-containing orphan drug since June 2017. The preliminary worth was round EUR15,500 per bundle. Although this was diminished to EUR7,000 in December 2019 following the opening of the ICA’s investigation, the ICA discovered that the brand new worth remained excessive.

Significantly, the ICA fined Leadiant although, as required by the nationwide regulatory regime, the corporate had agreed the worth with the Italian Medicines Agency.

Pharmaceutical corporations ought to take word {that a} worth deemed acceptable by a regulatory physique, akin to a nationwide medicines company, won’t essentially be seen in the identical means by the related competitors authority. This will particularly be the case if the worth is the results of an inequality of bargaining energy. In this respect, the ICA notes that the next factual components had a bearing on the negotiations: the orphan drug had already been in use in Italy for greater than two years and sufferers have been reliant on it; the negotiations had been ongoing for a while and it was turning into extra possible that no settlement can be reached; and there was no different remedy in Italy.

Some sources report that Leadiant intends to enchantment the ICA’s determination.

The ICA has not been the one nationwide competitors authority within the EU to research Leadiant for comparable conduct. In July 2021, the Dutch Competition Authority issued its first penalty for excessive pricing by fining Leadiant EUR20m for charging excessive prices for its CDCA-containing orphan drug. The Spanish Competition Authority can be investigating Leadiant for the identical alleged abuse.

While, traditionally, excessive pricing instances have been uncommon in Europe, lately there was elevated willingness by competitors authorities to pursue such instances within the pharmaceutical sector. In the UK, the Competition and Markets Authority imposed GBP260m in fines on a number of drug makers for excessive pricing and pay for delay agreements. The ICA itself fined Aspen EUR5.2m for excessive pricing behaviour again in 2016. At EU degree, the European Commission (EC) closed its excessive pricing investigation into Aspen final yr, accepting commitments for the primary time in a pharmaceutical antitrust case. Aspen agreed, particularly, to scale back the worth of the related medicine by an common of 73%. When the EC adopted the Aspen determination, EC Competition Commissioner Vestager careworn that it ought to function a warning to the sector: “Today’s decision gives a strong signal to other dominant pharmaceutical companies not to engage in abusive pricing practices to exploit our health systems”. We could nicely see different instances at each the EU and nationwide degree as antitrust authorities search to prioritise client welfare and to help nationwide well being companies coming below growing monetary stress within the wake of the Covid-19 pandemic.

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