Sigma-Tau raised an orphan drug 500x — regulators fined it €20.5M

Sigma-Tau was founded in 1957 by research chemist Claudio Cavazza in Pomezia, Italy. It grew into a €697M pharmaceutical group with 1,900 employees, best known for discovering L-carnitine — one of the few Italian drugs to achieve worldwide acceptance and the second product ever to receive US orphan drug designation. By the 2010s, the company, renamed Leadiant Biosciences, held a monopoly on chenodeoxycholic acid (CDCA), a lifesaving orphan drug for cerebrotendinous xanthomatosis (CTX), a rare metabolic disease that causes progressive neurological damage.

Between 2016 and 2018, Leadiant withdrew its cheaper CDCA drug Xenbilox from the European market and replaced it with a new version, Leadiant CDCA, at a vastly higher price. The price rose from €0.28 per capsule to €140 per capsule — a 500-fold increase. The Italian NHS was charged approximately €15,000 per treatment. The company had a dominant position because it was the sole supplier of CDCA, and CTX patients had no alternative treatment.

The Italian Competition Authority (AGCM) opened an investigation and in May 2022 fined Leadiant €3.5 million for abuse of dominant position under EU competition law. Leadiant appealed, but the fine was upheld by the Regional Administrative Court of Lazio in July 2023 and by Italy's Council of State in March 2024. The Dutch Authority for Consumers and Markets (ACM) separately fined Leadiant €17 million in 2025 for the same conduct in the Netherlands. The case reached the European Parliament, where MEPs questioned the company's pricing practices.

The fines forced Leadiant to reduce the price of CDCA for the Italian NHS. The case drew comparisons to Martin Shkreli's Turing Pharmaceuticals, though Leadiant's price increase was on a drug that had been available for decades. The scandal exposed a loophole in EU orphan drug regulation that allowed companies to obtain new market authorizations for old drugs and set prices without regard to the original cost of development.