Aspen shares drop after accusations of forced price hikes in Europe

PUBLISHED: Wed, 19 Apr 2017 09:38:44 GMT

Shares in Aspen Pharmacare fell 2.5 percent on Tuesday following a British newspaper report accusing the African company of withholding drugs to try to drive up prices in European markets.

Citing leaked internal emails, The Times newspaper reported staff at Aspen discussed destroying supplies of life-saving cancer medicines during a price dispute with the Spanish health service in 2014.

Aspen, Africa’s largest generic drugmaker, declined to comment on specific allegations because it could be in breach of sub-judice laws that apply to matters that are the subject of legal processes.

“Aspen has clearly demonstrated its commitment to providing quality medicines affordably over many years. The supply of the oncology products in question is no exception,” Aspen said in a statement to the Johannesburg Stock Exchange.

“Aspen looks forward to the opportunity to demonstrate the integrity and legality of its practices in the context of these legal processes.”

Shares in the company fell 2.5 percent to 273.17 rand by 0805 GMT, lagging behind a 0.7 percent decline in the Johannesburg’s Top-40 index. Tuesday was the first day of trading after the long Easter weekend.

Aspen, based in the South African city of Durban, has expanded overseas to benefit from the expiry of patents on best-selling drugs. That has helped to fuel a more than nine-fold increase in its share price since early 2008.

The company said the oncology drugs in question generated sales in the European Union of 60 million euros ($64 million) in the year to the end of June 2016, much of which was achieved on an average price of approximately 2 euros per tablet. ($1 = 0.9391 euros)

(Reporting by Tiisetso Motsoeneng; Editing by Keith Weir)

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.