3.5 Million Fine for Excessive Pricing Imposed on Pharma Company by Italian Anti-Trust Authority

On June 6, 2022 the decision of the Italian Anti-Trust Authority sanctioning Leadiant Biosciences was published. The investigation, which started in 2018, was concluded with an administrative sanction of over 3.5 million for abuse of dominant position.

The Italian Anti-Trust Authority held that the price negotiated with the Italian medicine agency (AIFA) was excessive and unfair on the basis of the following elements:

(i) Leadiant is a monopolist on the market and its orphan drug based on chenodeoxycholic acid (CDCA) is life saving;

(ii) Leadiant intentionally pursued a complex strategy aimed at increasing the price of CDCA;

(iii) Through an exclusive supply agreement with the only reliable supplier of CDCA, Leadiant blocked any galenic manufacturing of CDCA by hospitals;

(iv) Leadiant artificially differentiated CDCA from another drug (a cheaper medicine based on the same active substance as CDCA used off label since it had a difference therapeutic indication); and

(v) Leadiant intentionally delayed negotiations with AIFA, which ended up lasting 2.5 years.

The anti-trust investigation concluded that the drug price was (a) disproportionate compared to the aggregate costs incurred and (b) unfair given the nature of the product, the investments in research and development, the risk of registration and its added therapeutic value.

The above decision taken by AIFA is still subject to appeal by Leadiant. At the same time, anti-trust authorities in Belgium and Spain are investigating Leadiant’s conduct, while the Dutch authority has already issued a sanction.

About Paola Sangiovanni

Partner of GITTI and Partners. Seasoned transactional and regulatory legal counsel with a thorough understanding of the life sciences industry.

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