Antitrust Slaps Leadiant for Overpriced Life-Saving Drug

The case is closed. After the 3.5 million euro fine in 2022 for abuse of a dominant position, yesterday the Italian Competition Authority (AGCM) declared the investigation into the US pharmaceutical group Leadiant Biosciences closed.

This, together with Essetifin Spa, had imposed unjustifiably burdensome prices on the National Health Service (NHS) since June 2017 for the sale of a life-saving drug. Now, however, following the intervention of the AGCM, the two companies have complied with the Authority’s request with a significant positive impact, in terms of price reduction, for the NHS.

WHAT HAPPENED

Leadiant Biosciences and Essetifin Spa, the Agcm recalls, “had imposed unjustifiably high prices to sell the Leadiant chenodeoxycholic acid drug to the National Health System, used for the treatment of the rare disease called cerebrotendinous xanthomatosis”, an enzymatic defect that causes the accumulation, among other things, cholesterol in many tissues, including tendons and the central nervous system, causing neurological, cognitive and systemic dysfunctions.

THE AGCM’S INTERVENTION

In May 2022, therefore, the Authority intervened by sanctioning the group with a fine of 3.5 million euros as it established that the two companies, being in a dominant position and exploiting the weak negotiating position of demand, “had obtained a price for the orphan drug – equal to [5.000-7.000] euro per pack – too expensive because it is disproportionate to the costs incurred and unfair in light of the nature of the product, the investments in research and development made, the risk faced in the registration project, and the therapeutic value”.

At the end of a complex investigative activity it emerged that the abuse committed was “the result of a complex strategy – conceived by the group many years before and intentionally pursued – and which was also carried out through dilatory and obstructive behavior on the part of Leadiant in the procedure of negotiating the reimbursement price of the drug with AIFA”.

THE CLOSURE OF THE INVESTIGATION

Now, two years later, the AGCM has announced that it has closed the investigation “due to compliance by Leadiant Biosciences Ltd. and its parent company Essetifin SpA with the provision with which it had ascertained their abuse of a dominant position”.

In particular, the Authority “has ascertained that the new price of the drug negotiated by the two pharmaceutical companies with AIFA, in force from 15 March 2024, equal to approximately [2.000-4.000] euro per package, constitutes a significant reduction on the previous price which is, however, substantially in line with that applied before the abusive conduct”.