Novartis monopoly can be challenged, says health ministry over drugs dispute

Novartis Malta has filed an appeal before the Public Contracts Review Board (PCRB) to stop the government from issuing a competitive procurement process for a medication it already has stocks for.

Top brass from the Swiss pharmaceutical giant Novartis have accused the Maltese government of breaching EU rules on medicine procurement. In a strongly worded letter to Prime Minister Robert Abela dated 2 December 2020, the company accused the Maltese government of not following EU rules on the way it procures its medicines.

The matter has been ongoing since January 2020.

Novartis contends that the Central Procurement Supplies Unit, which is responsible for all government procurement of medicinals, is bypassing local agents who already supply Novartis products and have readily-available stocks of required medicines.

The complaint concerns the supply of the Novartis medicine Cosentyx, a prescription medication that is used for plaque psoriasis, psoriatic arthritis, and ankylosing spondylitis. Novartis insists that the CPSU is obliged to tap into local sources of stocked medicinals before seeking out other importers to provide any medicines that are out-of-stock.

In Malta, Novartis has been supplying the CPSU through a local distributor with Cosentyx since 2016 until August 2019. But in November 2019, when the CPSU ran out of its Cosentyx supplies, it did not open negotiations with the Novartis distributor, which has regular stocks of the medicinal.

Instead, it turned out that the CPSU was supplying patients with Cosentyx imported into Malta from outside the EU, more specifically from Australia by a company called Target Healthcare Limited, owned by Lewis Campbell. The latest direct order was last published on 29 September, with Target selected to provide the Cosentyx medication.

In comments to MaltaToday, the health ministry and the CPSU claim that Malta has a situation of monopoly given the exclusive rights of Novartis on the local market.

“The claims by Novartis are not factual and the Health Department had duly replied to the company directly. The PCRB ruled that CPSU were to proceed with the tendering process, as was done,” the ministry told MaltaToday.

“Moreover Novartis were reminded once again that as per direction given by the PCRB in Malta, when there is an appeal, the contracting authority is discouraged from procuring supplies, services or works, from the same company that filed the appeal due to abuse of dominance and to observe principle of competition rights.

“Therefore the CPSU had the responsibility not to interrupt treatment for patients and issued other procurement process to guarantee continuation of treatment,” the ministry said.

The ministry said the award was assigned to a UK supplier who supplied Malta with stocks that were being supplied to the UK market as well.

“An alternative treatment is now being supplied through a contract that was awarded following the proceedings of an open call for tender. The data on such award has been duly published as per legislation and is available to the public,” the ministry said.

Novartis claims the CPSU’s acquisition of the Australian imports of Cosentyx are contrary to EU laws “which require medicinal products distributed in the EU to bear safety features consisting of a unique identified and an anti-tampering device, and poses a risk to public health due to the unregulated distribution channels involved in their importation into Malta.”