Health and Medicine

Child cancer patients are the victims of ‘unfair’ drug prices

In October 2013 Aifa, Italy’s medicines agency, received an ultimatum: it had three months to agree to price rises of up to 2,100 per cent for five cancer drugs or the only manufacturer would stop supplying them.

Aspen Pharmacare, which had bought the rights to the drugs a few years earlier, set a January deadline for its demands to be met.

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One of the leaked emails which appears to show Aspen was intent on raising its drug prices

For the past six months, the South African company, which ran its European business from a subsidiary in Dublin, had been pushing for large price increases. Now, with Italy one of the few European countries yet to agree to them, Aspen decided to pursue more aggressive tactics. An internal email entitled “Italy-CONFIDENTIAL” sent on December 5, 2013, made the company’s intentions clear. “We have implemented the pricing across Europe . . . key markets remaining are — Spain — Italy — Portugal,” it said.

It stated that if the Italian medicines agency would not agree to new prices for the medicines, or to move them to a different category of drugs that would give Aspen freedom to set any price, “we will initiate supply termination in January until item can be resolved”.

“Legally we cannot be stopped supplying the products but we would obviously do this in a responsible way for patients and would like to manage our relationship with Aifa,” it added.

Aspen had been pushing Italy for much of 2013. Although it didn’t have any research and development or promotion costs because the drugs had been around for decades, it complained that it urgently needed to match higher prices the company had been able to secure in other countries, including England and Wales.

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In this email employees outline their intent to celebrate a drug price rise

Aspen even claimed that the medicines, bought from GlaxoSmithKline in 2009, were making a loss. However, internal financial documents later seized by the Italian competition watchdog made it clear that this was not true.

The threatened shortage appeared to be a real threat because a few months later Aspen stopped supplying Spanish packs after the authorities there refused to raise prices of €2 a pack to €100. Aspen is the only company that holds licences to sell the drugs, so if it carried out its threat, Italian pharmacies and hospitals would be forced to buy “foreign packs” from other European markets — at the higher prices charged in those countries.

As negotiations between Aspen and Aifa reached a head, pharmacists and doctors were reporting shortages, which the Italian competition watchdog later said it believed were a deliberate attempt by the drug company to increase the pressure on negotiators.

In emails between December 2013 and March 2014, a pharmacist in Trieste, northern Italy, wrote to Aspen’s Italian distributor, Laboratorio Farmacologico Milanese, to complain about a shortage of Puri-Nethol, which is used to treat lymphoblastic leukaemia in children. The pharmacist complained that supplies of the drug were limited “solely to protect economic interests”.

The pharmacist said he himself had a child who had cancer and complained that parents were “forced to follow useless roads to procure an essential paediatric oncology medicine [and] that they live every week asking themselves if — once the current package is finished — they will find another one”.

Aspen operated a “stock allocation system” to determine how drugs from a central European facility in Germany were allocated to different countries.

Although it has insisted this was merely to ensure that all markets had a stable supply, the Italian competition watchdog ruled that it allowed Aspen to ensure there was a shortage in Italy during the pricing negotiations.

Internal emails also showed that Aspen was well aware of the huge number of complaints about supplies in early 2014. In one email, an employee in Italy wrote to a colleague in Dublin to point out that the allocation quotas for two forms of melphalan, a chemotherapy drug, were “significantly below the average sales in the last eight months”.

“Should Aifa get to know this info, they could be able to use it to their advantage,” he warned.

Following the threat to end supply, Aspen submitted a second set of proposed price rises at a meeting with Aifa in late January. As the Italian watchdog later noted, “despite the significant similarity between the second and the first proposed price (judged by Aifa as unsustainable for the NHS)” an agreement was signed two days later.

The new prices led to the cost of the Aspen drugs to the Italian health service rising from €1.9 million in 2013 to €7 million in 2014. Across Europe, the drugs have sales of £50 million a year, according to the company.

Staff at Aspen circulated emails a few days later, with an Italian employee crowing that they “wouldn’t [have] expected to conclude the negotiation so favourably” and noting that a colleague had described it as “kind of ‘mission impossible’ ”. “Let’s celebrate!” it ended.

Immediately after the price rises were accepted, Aspen employees discussed “scratching out the allocation system for this product”.

Aspen’s actions ultimately led to an investigation by the Italian competition watchdog and it handed down a €5.2 million fine last year. It ruled that Aspen had aggressively exploited its monopoly position. It said that for many patients there was no alternative product and the price rise was not justified by any increase in production costs.

Aspen has denied abusing a dominant market position and is appealing against the ruling. Prices in Italy have not yet fallen. Aspen said that there was “no commercial logic to having different prices in different member states” and that the ability of wholesalers to export stock to a country with higher prices was an “inherent flaw in the concept of the European Union free market”.

Marco Pierani, of Altroconsumo, an Italian consumer organisation group that drew attention to the price rises, said that Aspen’s actions demonstrated a “hideous attitude”. Aspen had imposed unfair prices on “lifesaving cancer drugs which are irreplaceable for the most vulnerable sections of the population — the elderly and children”.

Alkeran 2mg tablets (melphalan)/ also sold as an injection 
England and Wales
 In 2013 it went up from £13.75 to £42.99 for a pack of 2mg tablets. Now £45.38, a 230 per cent increase
Italy
 Rose from €5.80 to €95.10, a 1,500 per cent increase

Leukeran 2mg tablets (chlorambucil)
England and Wales
 During 2013 it rose from £8.36 to £40.51. Now £42.87, a 400 per cent increase
Italy 
Up from €7.50 to €94.95, a 1,200 per cent increase

Puri-Nethol 50mg tablets (mercaptopurine)
England and Wales
 In 2013 it rose from £22.54 to £50.47. Now £54.27, a 140 per cent increase
Italy 
Up from €16.82 to €95.10, a 470 per cent increase

Thioguanine 40mg tablets 
England and Wales 
During 2013 it rose from £54.49 to £103.54. Now £109.57, a 100 per cent increase
Italy 
Rose from €53.99 to €219.44, a 300 per cent increase

Myleran 2mg film-coated tablets (busulfan)
England and Wales
 During 2013 it rose from £5.20 to £65.22. Now £69.02, a 1,200 per cent increase
Italy 
Not included in Italian inquiry but Aspen sought increase of 2,100 per cent to €387.84 in 2014