Western movies and competition law enforcement in the pharma sector: the Italian Competition Authority targets a producer of generic drugs in the Aspen case.

So, what do classic Western movies and competition law enforcement in the pharmaceutical sector have in common? Probably not so much. Watching Western movies through the lenses of a competition law geeks, the typical plots of those movies pitted colonies going to West to expand into new markets against Redskins that tried to prevent the market entry of those new operator. Alike, in competition investigations so far conducted in the pharmaceutical sector, drug originators are found to have frustrated or prevented the market entry of generics. Yet, the IncrementoPrezzo Farmaci Aspen (Aspen) recently opened by the Italian Competition Authority (ICA) departed from typical scenarion. Indeed, in Aspen the ICA started an Article 102 TFEU investigation against Aspen, a South African manufacturer of generic drugs, alleging that it had imposed excessive prices on the national health system.
Aspen was found to have a dominant position in the markets of anti-cancer drugs based on the active principles of alkeran, leukeran, purinethol and tioguanina. All the Aspen drugs were covered by the Italian national health system, which reimbursed the whole price paid by patients to buy the drugs.
The ICA believed that Aspen abused its dominance position when renegotiating with AIFA the selling prices of the drugs. Aspen argued that the previous prices of the drugs were lower than those of other EU countries, thereby favouring parallel imports from Italy into higher-priced countries. For this reasons, it asked for a considerable increase in the selling prices of the drugs so that to align them to the prices applied in other EU countries.

In the ICA view the Aspen request for a price increase was groundless. Indeed, Aspen did not submit any economic evidence in support for the request. It threatened to stop supplying its drugs to the Italian markets, if AIFA did not agree on the proposed higher prices. In this way, Aspen exerted such a pressure on AIFA, that it was eventually forced to agree on the price increases requested the drug manufacturer. And the ICA stressed that the Aspen conducts would cause the Italian national health system to spend much more to buy the drugs.

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