EU tests limits of drug pricing freedom in landmark probe | Reuters

The first ever EU antitrust probe into excessive drug pricing is taking the European pharmaceuticals industry into uncharted territory, unnerving some companies and lawyers worried about the reach of market intervention.

It comes as drugmakers face global pressure over the high cost of prescription medicines, with particular anger focused on makers of older generic products who exploit limited competition to force through big price rises.

The European Commission’s move last month to investigate if Aspen Pharmacare made “unjustified” hikes of up to several hundred percent in the cost of five old cancer drugs puts the EU executive in the vanguard of such enforcement.

In the past, the Commission has acted on specific market abuses, such as agreements between manufacturers of branded drugs and generics firms to delay the entry of cheaper copies.

The latest broad charge of excessive pricing, also described by Brussels as “price gouging”, potentially sets a precedent for more direct action, especially if officials rely on a formula for what is a reasonable or justified profit margin.

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EU tests limits of drug pricing freedom in landmark probe | Reuters.