BRUSSELS EU antitrust regulators will investigate whether Aspen Pharmacare is charging excessive prices for five key cancer drugs in a move which could lead to a hefty fine for Africa's largest generic drugmaker.
The European Commission said on Monday that it was looking into information that Aspen has imposed hefty and unjustified price increases of up to several hundred percent, and has withdrawn the drugs in some EU countries or threatened to do so in others.
Aspen acquired the medicines after their patent protection had expired. Its shares extended losses on news of the EU probe and were down 2.3 percent at 279.05 rand by 1020 GMT (6.20 a.m. ET).
The EU competition enforcer said the probe will focus on niche medicines containing the active pharmaceutical ingredients chlorambucil, melphalan, mercaptopurine, tioguanine and busulfan for treating cancer such as hematologic tumors.
"Companies should be rewarded for producing these pharmaceuticals to ensure that they keep making them into the future. But when the price of a drug suddenly goes up by several hundred percent, this is something the Commission may look at," European Competition Commissioner Margrethe Vestager said in a statement.
The investigation will cover all of Europe except Italy, which hit the company with a five-million-euro fine in October last year for price hikes up to 1,500 percent for some key drugs.
The EU enforcer can fine companies up to 10 percent of their global turnover for breaching the bloc's antitrust rules. It handed down multi-million euro penalties to a number of drugmakers in recent years for various offences.
Aspen, based in the South African city of Durban, has expanded overseas to benefit from the expiry of patents on best-selling drugs, fuelling a more than nine-fold increase in its share price since early 2008.
(Reporting by Foo Yun Chee, editing by Louise Heavens)