Staff at one of the world’s leading drug companies discussed destroying supplies of lifesaving cancer medicines in a battle to impose massive price rises across Europe, The Times can reveal. The proposal was raised at Aspen Pharmacare during a dispute with the Spanish health service in 2014 over attempts to increase the price of the medicines by up to 4000 per cent. The company, which runs its European operations from Dublin, began a continent-wide effort to drive up the price of five cancer medicines after buying the rights from the British company GlaxoSmithKline (GSK).
The price rises meant that the cost of busulfan, used by leukaemia patients, rose from £5.20 to £65.22 a pack in England and Wales during 2013, an increase of more than 1100 per cent. The price of chlorambucil, also used to treat blood cancer, rose from £8.36 to £40.51 a pack in the same year.
Aspen, a South African pharmaceutical company, bought the marketing rights to the “Cosmos” portfolio of oncology drugs from GSK in 2009 as part of a £273 million deal. GSK received a 16 per cent stake in the company in the agreement, which it has since sold for about $US2.2 billion.
The Cosmos drugs that Aspen bought were long out of patent but had no competition from other manufacturers. They included mercaptopurine, a treatment for acute lymphoblastic leukaemia, which occurs in children, and medicines for several types of cancer particularly prevalent among the elderly. There were limited alternative therapies for several of the drugs.
The price rises in England and Wales were possible because Aspen exploited a loophole that means companies are free to impose rises if an existing brand name is dropped. Branded medicines are subject to strict price controls, but the Department of Health does not limit the price of unbranded generics.
Last year, in response to an investigation by The Times, the government tabled legislation that would allow it to impose lower prices on medicines if it believed prices were excessive.
The Times has seen a cache of documents, including internal emails and presentations, which reveal how, from early 2012, Aspen began to target increases in the prices that health authorities across Europe paid for the drugs.
The company took an “aggressive” approach to negotiations, sometimes creating shortages of the medicines or threatening to stop supplying the drugs altogether to force health authorities to accept its demands, according to a ruling by the Italian competition watchdog (AGCM).
In October 2013 Aspen said it would stop supplying the medicines to Italy if the authorities did not agree to price rises of up to 2100 per cent within three months. Although the health service approved big rises a few months later, in the meantime there were drug shortages that AGCM has alleged were orchestrated to increase pressure on the Italian health authorities.
One pharmacist wrote to Aspen and its Italian distributor to complain that a wholesaler was having to choose which of two families with a child suffering from cancer was to receive the sole package they had because of a deliberately small supply.
In Spain, Aspen stopped direct supplies of five drugs from May 2014, leaving patients reliant on foreign packs of the medicines at much higher prices. In internal emails in October 2014, an employee at Aspen’s Dublin office asked what should be done with existing Spanish packs of the medicines. A senior executive replied that they could not be sold because Aspen had stopped supplying such packs as a result of the pricing dispute. He added that if the Spanish health ministry did not agree to higher prices, “the only options will be to donate or destroy this stock”.
Aspen did not address questions about destruction of the cancer drugs.
In other emails, employees discussed whether they would make more money by selling cancer drugs destined for Italy in Spain, even though they were aware that this would mean running out of stock in Italy.
There were reports of Cosmos drug shortages in several other countries including Germany, Greece and Belgium at about the same time.
Dennis Dencher, chief executive of Aspen Pharma Europe, said the price rises were “at levels appropriate to promote long-term sustainable supply to patients” and claimed they had been increased from “a very low and unsustainable base”. He acknowledged there had been shortages of the medicines but said these were not deliberate and the company had invested £55 million in a new manufacturing facility in South Africa to address supply problems.
A GSK spokesman said that the company “has had no involvement in the pricing of these medicines after selling the rights to Aspen”.
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