Roche under fire for alleged excessive pricing of cancer drug

‘Our estimate is that over 10 000 breast-cancer patients were not able to access treatment because of pricing’: Bakhe Majenge – chief local counsel, Competition Commission.

FIFI PETERS: Swiss-based multinational pharmaceutical company Roche has found itself on the wrong side of South Africa’s competition law. The Competition Commission has referred it to the [Competition] Tribunal for prosecution for [alleged] excessive pricing of a breast-cancer treatment.

Let’s get the detail from Bakhe Majenge, chief legal counsel  at the Competition Commission. Bakhe, thanks so much for your time. Just explain to us how exactly Roche [allegedly broke] our competition laws in your view, and furthermore went on to violate human rights – again in your view.

BAKHE MAJENGE: Good evening to you and your listeners. Thank you for the opportunity. Essentially what we found is that in respect of a breast-cancer treatment drug which is called Trastuzumab,

… in the private sector between 2011 and 2020, Roche charged a price close to R400 000 per annum for treatment, and in the public sector between 2015 and 2020 they charged approximately R160 000.

In the private sector you have to bear in mind that this drug was introduced as a ‘prescribed minimum benefit’ only in 2019, more recently. Before that the drug was available only to scheme members who had comprehensive cover.

But even those members with comprehensive cover were subject to a very high co-payment, because obviously the cost of the treatment is too steep.

FIFI PETERS: I was reading the statement that the commission issued, and one of the challenges that you faced in conducting this investigation was the lack of data that was provided on behalf of Roche, as a result of citing laws in Switzerland that it claimed did not allow it to be as forthcoming with this data as you sought. So how is it that you were able to arrive at the exact numbers and [Roche’s actual prices?] I’m trying to ascertain the quantum of the differences between what they should have been charging breast-cancer patients and what they did.

BAKHE MAJENGE: You are quite correct. Unfortunately during the investigation process, Roche declined to provide the Competition Commission with cost data, and this cost data would’ve enabled us to directly check the price against the actual cost that they have incurred.

So the commission had to resort to a cost estimate, looking at the protection cost of a biosimilar drug or lookalike drug; and looking at the cost of the biosimilar drug we then arrived at the conclusion that the price that is charged by Roche for Trastuzumab [was] excessive.

FIFI PETERS: Have you had a response from Roche since the commission issued the statement?

BAKHE MAJENGE: In terms of the process they of course have about 20 days to file their papers in response to the commission’s prosecution. But at this stage we are not aware of any public statement that they may have issued.

FIFI PETERS: Can you just give us a sense of the number of people who, as a result of this [alleged] excessive pricing over the period that it took place, who were not able to access this treatment for breast cancer?

BAKHE MAJENGE: Our estimate is that over 10 000 breast-cancer patients were not able to access treatment because of pricing. Of course, I must say, this is a conservative estimate. The numbers could be more. But we found that just over 10 000 patients were unable to access treatment.

We also have to bear in mind that HER2-positive breast cancer is one of the most aggressive forms of breast cancer, and access to treatment is then critical.

Hence as you pointed out, it raises constitutional issues and has a direct relationship with the right [enshrined] in the Bill of Rights of access to affordable healthcare.*

FIFI PETERS: Right. So how are you guys looking to fix this? What penalty are you seeking from Roche?

BAKHE MAJENGE: We are seeking the maximum penalty permissible in terms of the Competition Act, which is 10% of the group turnover. So we are not asking only for the penalty to be levied against the South African arm of Roche or the South African subsidiary – we are asking for [it to be levied against] the turnover of the entire group, including the holding company, which is Switzerland based.

FIFI PETERS: Quite a sizeable penalty there. It will definitely be interesting to see how this case develops and what kind of defence we see coming from the Swiss pharmaceutical maker, Roche. You can imagine 10% being translated from Swiss francs to rands – that’s a whole lot of ching, ching. But thanks so much, Bakhe, for your time. I’ll leave it there. Bakhe Majenge is the chief legal council at the Competition Commission.

*[According to the CompCom’s statement, “Trastuzumab is a first line treatment life-saving drug which stops the development of an aggressive type of breast cancer called Human Epidermal Growth Factor Receptor 2 Positive (HER2+) breast cancer.”]

AUTHOR PROFILE

COMMENTS   0

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Subscribe to our mailing list

* indicates required
Moneyweb newsletters

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.
INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us: