(Bloomberg) -- Aspen Pharmacare Holdings Ltd. faces a European Union antitrust probe for ramping up the price of cancer drugs as the EU joins a global crackdown on the soaring cost of life-saving generic medicines.
"When the price of a drug suddenly goes up by several hundred percent, this is something the commission may look at," EU Competition Commissioner Margrethe Vestager said in an emailed statement on Monday.
The EU’s first investigation into so-called excessive pricing of medicines follows Italian and British action against pharmaceutical price increases. U.S. officials have been looking at pricing of generic medicines for more than two years, triggering civil lawsuits from customers who say they were overcharged. The EU can impose fines of as much as 10 percent of a company’s yearly revenue.
More than a dozen generic cancer treatments have seen their prices more than double between 2011 and 2016 in the U.K., even as the country’s National Health Service took aim at expensive new targeted tumor drugs. Such cases have up-ended common perception that prices of critical medicines will only fall after patents expire and drugmakers have recouped costs.
Aspen shares fell as much as 3 percent and were down 2.5 percent lower at 278.64 rand as of 12:57 p.m. in Johannesburg. Shares tumbled last month on a U.K. newspaper report of a dispute on pricing with Spanish authorities.
Aspen said it "takes compliance with competition laws very seriously and will work constructively with the European Commission in its process," according to a statement.
Africa’s largest maker of generic medicines, which also sells products such as hormones, infant formula and antiretroviral medicines in more than 150 countries, said in March it sees pressure on drug prices, especially in Europe.
The EU said it’s probing Aspen’s pricing practices for medicines using the active pharmaceutical ingredients chlorambucil, melphalan, mercaptopurine, tioguanine and busulfan. They are used to treat cancer and sold in different formulations and under multiple brand names. Aspen acquired them after initial patents expired.
Regulators said they’ll check whether Aspen conducted "so-called price-gouging" by imposing price increases of up to several hundred percent. The EU says it’s been told Aspen threatened to withdraw medicines in some countries and "has actually done so in certain cases."
The probe covers all of the European economic area except Italy where the country’s antitrust authority fined the company 5 million euros ($5.5 million) last year for raising prices on cancer drugs by as much as 1,500 percent starting in 2014. That related to an anti-tumor drug package Aspen bought from GlaxoSmithKline Plc., a former shareholder.