BioWorld International Correspondent
LONDON - Genzyme Corp.'s UK subsidiary has been fined £6.8 million (US$10.6 million) for abusing its dominant position in the market for the Gaucher's disease treatment Cerezyme.
The Office of Fair Trading (OFT), which oversees competition law in the UK, said that in pricing the drug to include home delivery and home-infusion services, Genzyme was preventing competitors from offering the same services. In addition to the fine, the OFT said that in the future Genzyme should supply Cerezyme at a stand-alone price for the drug, exclusive of any services.
With about 30 Gaucher's patients in the UK, the fine equates to £230,000 per patient.
Genzyme Ltd., based in Oxford, said the decision is misguided, and it intends to challenge the ruling. The company claims the OFT ignored the scientific and medical evidence it presented.
Malcolm Johnson, vice president and general manager of Genzyme Therapeutics UK and Ireland, said in a prepared statement, "The OFT is not acting in the best interests of patients and has, in fact, fundamentally misunderstood the markets for drugs that treat ultra-orphan diseases and for the sophisticated home health care services associated with those drugs."
Dominic Moreland, director of Genzyme Homecare, said the company was putting its patients first. "We remain convinced that we can best provide patients with the highest quality of care if we are able to offer homecare services ourselves to an extremely small number of patients."
But John Vickers, director general of the OFT, said Genzyme's abuse of its dominant market position has prevented viable competition and choice. "This constitutes a serious infringement of the Competition Act and this is reflected in the level of the financial penalty."
Johnson said the fine, which represents 10 percent of Genzyme's revenue from Cerezyme sales in the UK over the past four years, is clearly not justified by the findings in the OFT ruling. "We are confident of our position on appeal." He pointed out that no OFT competition decision has ever been fully sustained on appeal.
On a wider perspective Johnson believes the ruling could undermine orphan drug research. "One of our concerns is that this interference in the pricing of pharmaceuticals by the OFT could damage research into new treatments for rare diseases, research that the European orphan medicinal products regulation is intended to encourage."
Although there are only 30 patients at present, Genzyme has ambitions to extend its home nursing and infusion service to patients receiving enzyme replacement therapy for other lysosomal storage disorders, including Fabrazyme for Fabry disease and Aldurazyme for treating MPS-1. Genzyme used to provide homecare services through a contract agency, but in May 2001 set up its own home nursing services. Patients being treated for Gaucher's disease typically receive intravenous injections of Cerezyme every two weeks.