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June 19, 2017

We condemn extortion and profiteering by pharmaceutical monopolies

The South African Federation of Trade Unions welcomes the Competition Commission’s investigation into price-fixing allegations against pharmaceutical companies, following concerns raised by Advocates for Breast Cancer, the Cancer Alliance, the Cancer Association of South Africa and SECTION27.
The pharmaceutical companies that are currently being investigated include Roche, which supplies lifesaving breast cancer medicine in South Africa, Pfiizer, which supplies lung cancer medicine and Aspen which provide of life-saving medicine for different forms of cancer.
The Commission will follow up allegations that these companies are exploiting cancer suffered through their monopoly position by charging excessive amounts for medicines which save lives and potentially killing those who cannot afford them.

Information possessed by the Commission confirms that breast cancer treatment is unaffordable in South Africa and many medical aid schemes refuse to pay the treatment based on cost. For example, a 12-month course of Roche’s Herceptin in the private sector costs over R500 000, or more if a higher dosage is required. As a result of exorbitant prices, most breast cancer patients in both the private and public sectors cannot get treatment.

The Commission is also looking into allegations that companies are protecting the monopoly position by getting round patent laws by patenting “new” versions of an existing patented product with minor changes or just a different name, in order to delay the introduction of generic versions of the same medicine into the market.

One of the companies, Aspen, has just been fined €5.2 million after an appeal relating to its portfolio of oncology products distributed in Italy was dismissed.

When bargaining over drug prices in Spain in 2014, Aspen is reported to have threatened to stop selling the cancer treatments unless the health minister agreed to price rises of up to 4,000%. Another leaked email appears to reveal that staff at Aspen even discussed destroying stocks of life-saving medicines during this price row. This is pure blackmail and extortion!

SAFTU agrees with the Competition Commission that the healthcare sector, and in particular, pharmaceuticals, is a priority sector for its enforcement efforts, due to the likely negative impact that anti-competitive conduct in that sector would have on consumers in general and specifically the poor and vulnerable.

The federation sees the abuses being uncovered by the Commission as further evidence that there is no ‘free market’ in this crucial sector of the economy but a cartel of monopolies dominated by the likes of Roche, Pfizer and Aspen. They must not be allowed to hold the sick and poor to ransom by exploiting their dominance of the market.

SAFTU demand that if the allegations are proved, these companies must be punished as severely as the law permits, but believes that this will not solve the underlying problem which is that pharmaceutical supply should operate as a public service rather than a private business.

The companies in this sector must be nationalized and operate as public enterprises under democratic control, guided solely by a mandate to provide medicines as safely, efficiently and cheaply as possible to meet the needs of the sick and not to make super-profits for monopolized private profiteers.