ASPEN PHARMACARE HOLDINGS LIMITED - European Commissions acceptance of Aspens commitments to address the preliminary assessment regarding pricing

European Commission’s acceptance of Aspen’s commitments to address the preliminary assessment regarding pricing

ASPEN PHARMACARE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa) (“Aspen Holdings”)
Registration number: 1985/002935/06
Share code: APN
ISIN: ZAE000066692
LEI: 635400ZYSN1IRD5QWQ94
and its subsidiaries (collectively “Aspen” or “the Group”)


EUROPEAN COMMISSION’S ACCEPTANCE OF ASPEN’S COMMITMENTS TO ADDRESS THE PRELIMINARY
ASSESSMENT REGARDING PRICING PRACTICES FOR CERTAIN PRODUCTS IN THE EUROPEAN ECONOMIC
AREA

Shareholders are referred to the Aspen SENS announcement of 14 July 2020 wherein the progress
made in the investigation of the European Commission (“the Commission”) of Aspen Holdings
and certain of its European subsidiaries was reported. This investigation was under Articles 102(a)
of the Treaty on the Functioning of the European Union (“TFEU”) and Article 54 of the European
Economic Area Agreement (“EEAA”) and was in respect of the molecules (i) Chlorambucil; (ii)
Melphalan; (iii) Mercaptopurine; (iv) Tioguanine; and (v) Busulfan (“the Products”) sold in the
European Economic Area(1) (excluding Italy) (“EEA”).

The Commission adopted a preliminary assessment, following its investigation, setting out
concerns that Aspen may have abused its dominant position by imposing unfair prices pursuant
to Article 102(a) TFEU and Article 54 of the EEAA.

The Products generated approximately EUR 28 million in revenue for the financial year ended 30
June 2020 in the EEA. Over 80% of the revenue is generated by solid dose form Products that are
currently sold at an average price of less than EUR 2 per tablet and approximately EUR 3 per
patient per day, this despite the Products’ low volumes (each Product treats, on average, around
200 patients per year per EEA Member State with one product having an average as low as 8
patients). The average prices of all of the Products are well below those of certain other post-
patent originator oncology drugs that face generic competition in the EEA. In addition, in a
number of Member States, certain of the Products faced higher priced generic equivalents.

Consequently, Aspen disagreed with the Commission’s preliminary assessment. Notwithstanding
this, in order to meet the Commission’s competition concerns, Aspen proposed commitments
pursuant to Article 9(2) of Regulation (EC) No 1/2003 (“the Proposed Commitments”).

The Commission has accepted the Proposed Commitments after market testing them with
interested third parties. Accordingly, the Proposed Commitments (hereafter referred to as “the
Binding Commitments”) are now binding upon Aspen and the Commission has closed its
investigation with no finding against Aspen.



The Binding Commitments are unchanged from the Proposed Commitments reported in the SENS
of 14 July 2020. The key elements of the Binding Commitments are as follows:

    - Average price reductions per Product across the EEA of between 27% and 79% (overall
      average of 73%);
    - Aspen to maintain such reduced prices for ten years and guarantee supply for at least five
      years;
    - After five years, should Aspen wish to cease commercialising any of the Products it will
      make them available for sale to a third party, or absent an interested purchaser, maintain
      the marketing authorisations; and
    - Aspen will make a one-time payment to the relevant entities responsible for
      reimbursement of medicines and other beneficiaries as appropriate to bridge the
      implementation of the price reductions. This payment is in line with the EUR 24 million
      (ZAR 430 million(3)) that Aspen had provided in respect of this matter in its financial
      statements at 30 June 2020.


Aspen is pleased that the Commission has accepted the Binding Commitments resulting in the
resolution of this matter.

Aspen is focused on ensuring supply and access to quality, affordable pharmaceuticals for our
patients. This object has been achieved over many years and reflected in the role it has played
in saving millions of lives across Africa through pioneering and supplying generic anti-retroviral
medicine for the treatment of HIV/AIDS. The current COVID-19 crisis has demonstrated the
importance of governments and companies cooperating to prioritise access to pharmaceuticals.
Aspen, as a leading supplier of Anaesthetics, Thrombosis treatments and most recently
dexamethasone, has and will continue to work closely with authorities to ensure the supply of
medically critical products throughout the world, including in the EEA. In addition, Aspen is
preparing for the imminent production of a Covid-19 vaccine at its Port Elizabeth facility, further
underlining its position as a key contributor to the fight against the pandemic.

Footnotes:
(1)The European Economic Area comprises the EU Member States (including the United Kingdom) together with
   Iceland, Liechtenstein and Norway.
(2)Article 9 enables companies under investigation by the Commission to offer commitments in order to meet the
   Commission's concern.
(3)At the 31 December 2020 exchange rate of ZAR 17.91 / EUR

Durban
10 February 2021

Sponsor
Investec Bank Limited






Date: 10-02-2021 02:33:00
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