Cancer treatment costs in South Africa have skyrocketed in recent years, leaving patients grappling with the financial burden of life-saving medications. The prices of chemotherapy drugs, targeted therapies, and immunotherapies have surged to exorbitant levels, making them unaffordable for many South Africans, even with medical insurance coverage. This crisis has prompted a closer examination of the factors influencing the pricing of cancer medicine.

Pharmaceutical companies play a pivotal role in determining the cost of cancer medication. The need for extensive research and development, coupled with regulatory requirements, often justifies high prices. However, critics argue that the pricing structures adopted by some companies are excessive and exploitative. They claim that the profit-driven motives of pharmaceutical giants overshadow the ethical obligation to provide affordable and accessible treatment options.

Aspen Pharmaceuticals (JSE:APN) is a South African based multinational pharmaceutical company, founded in 1871. It has operations in over 150 countries and provides affordable, accessible, and high-quality medicines to patients worldwide.

The company has a strong commitment to ethical business practices and compliance with all relevant laws and regulations, including those related to the marketing, sale, and distribution of its products.

In recent years, Aspen has faced criticism and legal action over the pricing of some of its products, including life-saving cancer medicines. The company has been accused of excessive pricing and exploiting patients in need of these treatments.

It further added that the Competition Commission was in possession of information that gives rise to a reasonable suspicion that Aspen has and continues to engage in the excessive pricing in the provision of certain cancer medicines in South Africa, namely:

1. Leukeran (active ingredient chlorambucil) is a chemotherapy medication used to treat chronic lymphocytic leukaemia, Hodgkin lymphoma, and non-Hodgkin lymphoma;

2. Alkeran (active ingredient melphalan) is typically used to treat multiple myeloma (bone marrow cancer) and epithelial ovarian cancer; and

3. Myleran (active ingredient busulfan) is used in paediatrics and adults as a conditioning agent prior to bone marrow transplantation, especially in chronic myelogenous leukaemia (CML) and other leukemias, lymphomas, and myeloproliferative disorders.

The Competition Commission was of the view that Aspen appears to be a dominant firm in the provision of the Leukeran, Alkeran and Myleran drugs in South Africa.

In terms of Myleran, Aspen appears to be the only supplier of a generic version of busulfan in tablet form. No other products containing the same active ingredient appear to have been registered by the South African Health Products Regulatory Authority (SAHPRA).

Aspen’s Leukeran brand is listed as a generic and there does not seem to be a listing for an originator product in the country. According to Health Action International (HAI), an originator is the product that was first authorised world wide for marketing (normally as a patented product) on the basis of the documentation of its efficacy, safety and quality, according to requirements at the time of authorisation. 

Despite these challenges, Aspen claims to remain committed to its mission of providing access to essential medicines for people in need. The company continues its pursuits to invest in the development of new and innovative treatments for a range of conditions, and works closely with governments, healthcare providers, and patient organisations to ensure that its products are widely available and accessible to those who need them. This was the same mission that Valent Pharmaceuticals had under the leadership of its most infamous CEO and once Wall Street headboy, J. Michael Pearson.

Aspen was investigated by competition authorities in various European countries for alleged excessive pricing on Leukeran, Alkeran and Myleran, among other products. The European Commission also launched an investigation in the European Union. Given that Aspen supplies similar products in South Africa, the European Commission had reasonable grounds to suspect that Aspen may be engaging in similar conduct locally.

Moreover, Aspen appears to be either the only supplier or at least a dominant supplier of these products in both the South African and European markets. Given that Aspen’s products are listed as generic products, it is of concern that none of the markets have observed significant entry of other generic products by competing pharmaceutical companies.

On 15 May 2017, the European Commission opened a formal antitrust investigation into concerns that Aspen has engaged in excessive pricing. The investigation concerns Aspen’s pricing practices for niche medicines containing the active pharmaceutical ingredients chlorambucil, melphalan, mercaptopurine, thioguanine and busulfan, which the commission released a 55 page conclusion on 16 April 2021.

Reuters reported that the competition enforcer said there were no legitimate reasons for Aspen’s very high profit levels especially when the drugs used to treat certain serious forms of blood cancer, including myeloma and leukaemia, had been off-patents for 50 years.

Aspen made a commitment to the EU Commission to reduce prices for 10 years, retroactive to October 2019. Aspen will guarantee supplies for five years and will also continue to supply or make its marketing authorisation to other suppliers for an additional five years. The pledge is valid for 10 years. Aspen could have faced a fine of up to 10% of its global turnover on top of a finding of wrongdoing if found guilty of breaching EU rules, it further added.

On 29 September 2016, the Italian Competition Authority (ICA) issued a decision fining Aspen Pharmacare €5 million for abusing its dominant position contrary to Article 102 TFEU and Article 3 of Law No. 287/90 of the Italian Competition Act, by charging excessive prices for the supply of certain cancer-treating drugs.

Similarly, in the UK and Spain, Aspen is alleged to have attempted to sell cancer medicines for up to 40 times their previous prices. Similar price increases were observed for Leukeran, also used by leukaemia patients, and Alkeran. During price negotiations between Aspen and the Spanish health service in 2013, Aspen allegedly threatened to stop selling cancer drugs unless the health authority agreed to price increases of up to 4 000%.

The Commission concurrently launched an investigation against Swiss multinational, Roche Holding AG (Roche), relating to the provision of lifesaving breast cancer medicine in South Africa. Roche and its USA-based biotechnology company, Genentech Inc. (Genentech) have and continue to engage in excessive pricing, price discrimination and exclusionary conduct in the provision of breast cancer medicine in South Africa, the Competition Commission said.

Breast cancer is the leading form of cancer affecting women in South Africa. Medication known as Trastuzumab is recommended as an essential medicine by the World Health Organisation (WHO) and is primarily used to treat breast cancer and some types of stomach cancer. In South Africa, only Roche’s branded versions of Trastuzumab are available and are sold under the names Herceptin and Herclon. Genentech provides exclusive marketing rights to Roche for Trastuzumab in South Africa.

SAHPRA plays a crucial role in approving drugs and setting regulations. It must balance the need for safety and efficacy with the urgency of affordable access. Critics argue that these bodies, such as SAHPRA, should be more proactive in negotiating fair prices with pharmaceutical companies, especially for lifesaving cancer medications.

Patient advocacy groups, NGOs such as CANSA, and concerned citizens have been at the forefront of demanding more affordable cancer medicine in South Africa. Their efforts have brought attention to the issue, urging the government to take action. The South African government has initiated discussions and reforms to improve access to affordable cancer treatment. Measures such as compulsory licensing, price negotiations, and local production are being explored to address the pricing crisis.

The exorbitant cost of cancer medication in South Africa presents a grave challenge to the healthcare system and patients in need. While pharmaceutical companies, patent laws, regulatory bodies, intermediaries, and distributors all contribute to the pricing dynamics. 

It is essential to strike a balance between innovation and affordability. A collective effort involving patient advocacy, government intervention, and cooperation from all stakeholders is necessary to ensure that lifesaving cancer medication becomes accessible to all South Africans. Only then can we truly alleviate the burden of this debilitating disease and safeguard the right to health for all.