€17m fine imposed to pharma pirate Leadiant upheld on appeal
Court: “The exorbitant price increase is a textbook example of abuse of a dominant position”
AMSTERDAM, THE NETHERLANDS:
The District Court of Rotterdam has rejected the appeal of pharmaceutical company Leadiant against the 2021 decision of the Netherlands Competition Authority (the Authority for Consumers and Markets - ACM).
The Court upheld the fine of €17 million imposed by the ACM for excessively increasing the price of the orphan drug CDCA.
This ruling clearly sets limits on the prices that pharmaceutical companies can charge: the court specified that a price that has risen from €46 to €13,090 per package exceeds all limits in the absence of proper substantiation. The court calls the exorbitant price increase “a textbook example of abuse of a dominant position”.
The court confirms that the Dutch health insurers have had to pay an excessive price for the drug CDCA for almost 2.5 years.
Wilbert Bannenberg, PAF chairman, said: “the Pharmaceutical Accountability Foundation is pleased that the Rotterdam court has upheld the fine of € 17 million for Leadiant for abuse of its dominant position. The court’s ruling now offers the health insurers an opportunity to recover the overpayment from Leadiant.”
Leadiant had obtained this market position in 2017 due to an exclusivity in the orphan drug market that can be granted by the European Commission to companies that invest in the development of a new drug for rare diseases and bring it to the market.
More info about the Leadiant CDCA case on the PAF website:
Original text of the judgment (in Dutch):
English summary of the Rotterdam District Court’s Verdict (machine translated):
The ACM [Dutch Competition Commission] has imposed a fine on a drug manufacturer [Leadiant] for abusing its dominant position by charging and collecting an excessive price for its own CDCA medicine in the Netherlands.
The court is of the opinion that the ACM was right to establish that the pharmaceutical manufacturer had abused its dominant position. ACM has carefully and objectively assessed the excessiveness and fairness of the price of the CDCA medicine. The court agrees with the ACM that registration of CDCA as a medicine for the treatment of CTX [Cerebrotendinous-xanthomatosis] does offer advantages that can justify a certain price increase, but a price that, in intermediate steps, has gone from €46 to €13,090 per package, goes beyond all limits in the absence of a sound substantiation.
The active ingredient in the CDCA medicine has been used successfully for decades to treat CTX and all the drug manufacturer has done is to take the opportunity to administratively register the drug for that decades-long treatment method in order to acquire an exclusive right.
The exorbitant price increase that was subsequently applied is a textbook example of abuse of a dominant position. This abuse is even more pressing because it took place on the backs of vulnerable patients who cannot do without this medicine. The drug manufacturer has used this for its own financial gain.
The ACM was right to impose a fine, but that the amount of the fine should be reduced because the entire procedure had taken too long. For the rest, the appeal is unfounded.