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Aspen’s proposed commitments to address the European Commission’s preliminary assessment regarding pricing practices

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


In May 2017, the European Commission (“the Commission”) opened an investigation of Aspen
Holdings and certain of its European subsidiaries (“Aspen”) 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”). The investigation 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 has now 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 disagrees with the Commission’s preliminary assessment. Notwithstanding
this, in order to meet the Commission’s competition concerns, Aspen has proposed commitments
pursuant to Article 9(2) of Regulation (EC) No 1/2003 (“the Proposed Commitments”).

The Commission has responded positively to the Proposed Commitments which it intends to accept,
subject to market testing. Market testing will allow interested third parties to submit their
observations on the Proposed Commitments to the Commission within the next two months. If the
result of the market testing is favourable the Proposed Commitments will become binding upon
Aspen and the Commission will close its investigation without any finding against Aspen.

The key elements of the Proposed 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
   - 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.

Aspen is focused on ensuring supply and access to affordable pharmaceuticals for our patients and
will continue to cooperate with the Commission to prioritise patient needs. This is consistent with
Aspen’s vision of providing quality affordable medicines, an object 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 further 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

Aspen is pleased that the Commission has responded positively to the Proposed Commitments and
is hopeful that the result of the market testing will also be supportive of the proposed resolution of
this matter.

(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. If the market test indicates that the commitments are a satisfactory way of addressing the
   Commission's competition concerns, the Commission intends to adopt a decision making the commitments legally
   binding on Aspen. Such a decision would legally bind Aspen to respect the commitments it has offered and would result
   in no finding that there is an infringement of EU antitrust rules.

14 July 2020

Investec Bank Limited

Date: 14-07-2020 11:58:00

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