Italian firm fined €19.6 million for inflating drug price 30,000% in Netherlands

A Dutch watchdog fined Italian drug manufacturer Leadiant 19,569,500 euros for jacking up the price of a prescription medication it acquired in 2008. At that time, the drug cost 46 euros for a package of 100 capsules, but essentially the same medication was being sold for 14 thousand euros in 2017, the Authority for Consumers and Markets (ACM) alleged.

The drug is based on chenodeoxycholic acid (CDCA) and is used to treat people with cerebrotendineous xanthomatosis, a rare metabolic disorder. About sixty people in the Netherlands suffer from the disease, which requires use of the medicine for the rest of their lives, the ACM said.

Leadiant acquired the drug in 2008, changed the brand name to Xenbilox, and raised the price 19-fold to 885 euros per 100 capsules. Five years later, Xenibilox was granted "orphan drug designation", meaning that its use is so rare it requires government support to be deemed profitable. At that point, the price was raised to 3,103 euros.

"When Leadiant in April 2017 was also granted the marketing authorization, the company was granted the exclusive right for ten years to supply a CDCA-based drug for the treatment of CTX to the European market," the ACM said.

Leadiant then discontinued Xenibilox and began selling what the ACM said was essentially the same drug under the name CDCA-Lediant in 2017. "Although those two drugs do not differ in efficacy, safety, and form, and Leadiant had already recouped the application costs at that point, Leadiant increased the selling price to 14,000 euros."

From that point on, the cost to treat one patient for one year swelled to 153 thousand euros. That sum was about 500 euros in 2008. "As such, Leadiant abused its dominant position," ACM said.

The Amsterdam University Medical Center decided it would try to produce the drug on its own to provide a lower-cost option in the Netherlands. They successfully reverse-engineered the drug and began producing it in its own pharmacy in January 2020.

The ACM acknowledged that Leadiant did enter into negotiations with the Ministry of Health to provide the medication at a lower cost, but the watchdog said the pharmaceutical firm was not active enough in those negotiations.

"Drugs manufacturers that introduce affordable, innovative prescription drugs make important contributions to society. And it’s okay to make money on such contributions. This situation however was something entirely different," said ACM Chair Martijn Snoep. "After a small, low-risk investment, Leadiant implemented a huge price increase for a drug that had already existed for years."

There were no added benefits for the patients receiving the drug, despite the increase in price, Snoep said. "In this case, there was no innovation at all. We consider this to be a very serious violation."