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On 13 February 2025, the District Court of Rotterdam ruled in favour of the Netherlands Authority for Consumers and Markets (ACM) regarding the appeal filed by pharmaceutical company Leadiant. The court affirmed the decision to fine the manufacturer for its abuse of a dominant market position, specifically for charging prices that were deemed excessive and unfair.
The medication chenodeoxycholic acid (CDCA)-Leadiant is used to treat patients suffering from the rare inherited metabolic disorder cerebrotendinous xanthomatosis (CTX). Approximately sixty patients are affected in the Netherlands, and they require the medication throughout their lives.
Historically, the drug has been administered under various names and at significantly lower prices for CTX treatment. In 2008, Leadiant acquired a CDCA-based medication from another producer, with the maximum price in the Netherlands at that time set at 46 euros for a package of 100 capsules. However, at the end of 2009, Leadiant rebranded the drug as Xenbilox and raised the price to 885 euros.
In 2014, Leadiant sought orphan drug status and marketing authorization for its CDCA-based product intended for CTX treatment, which resulted in a further price increase of Xenbilox from 885 to 3,103 euros. The orphan drug status was granted at the end of 2014, and upon receiving marketing authorization in April 2017, Leadiant secured the exclusive right to market the only CDCA-based drug for CTX treatment in Europe for a decade.
In June 2017, Leadiant introduced CDCA-Leadiant in the Netherlands and ceased the sale of Xenbilox. Although both medications were equivalent in efficacy, safety, and appearance and Leadiant had already recovered its application costs, the company raised the price to 13,000 euros for a package of 100 capsules. Consequently, the annual cost for a patient amounted to approximately 153,000 euros.
The ACM determined that from June 2017 to December 2019, Leadiant maintained a dominant market position in the Netherlands concerning CDCA-based treatments for CTX, with no alternative options available during that timeframe. As a result, CTX patients relied solely on CDCA-Leadiant, compelling health insurers to continue covering the medication. Leadiant charged a price for CDCA-Leadiant, which the ACM deemed excessively high and unfair under the standard United Brands test.
This pricing was considered excessive due to the substantial profit margin resulting from low production costs and risks. It was also deemed unfair, as the drug had previously been available under a different name at a significantly lower price, with minimal advantages for patients from its orphan drug status.
In its defence, Leadiant had argued that it did not disadvantage patients but health insurers and claimed it never intended to set a price of 13,000 euros. The responsibility for the inflated prices lies squarely with the health insurers and the Ministry of Health, Welfare, and Sport, the manufacturer said.
Leadiant contended that it had proposed negotiations with both health insurers and the Ministry to secure a significantly reduced price. However, the insurers and the Ministry declined to participate in discussions, opting instead to “name and shame” Leadiant and share confidential information with the parliament and the media.
The ACM, however, maintained that Leadiant had a specific obligation to actively and swiftly reach a negotiation outcome that would not be considered excessive, given its dominant position in the market. According to the ACM, both the insurers and CTX patients were disadvantaged; the patients due to uncertainties regarding the reimbursement and procurement of their CDCA medication.
The Rotterdam district court upheld the ACM’s conclusion that Lediant had abused its dominant market position. The ACM performed a comprehensive and unbiased assessment of the CDCA medicine’s pricing, evaluating both its excessiveness and fairness. The court agreed with the ACM’s finding that the approval of the CDCA medicine for CTX treatment offers certain advantages that could justify a price increase. However, without sufficient justification, a price surge from 46 to 13,090 euros per package clearly surpasses reasonable limits.
The active ingredient in the CDCA medicine has been effectively used for decades in treating CTX, and the manufacturer sought merely to obtain administrative registration for this well-established treatment method to secure exclusive rights. The substantial price increase that ensued represents a classic example of abusing a dominant market position. This misconduct is particularly concerning as it negatively impacts vulnerable patients who depend on this medication, with the manufacturer prioritizing its financial interests.
