On 2nd December 2014, the Italian Administrative Court of first instance (“IAC”) upheld the € 180 million fine imposed on F.Hoffmann-La Roche Ltd. (“Roche”) and Novartis AG (“Novartis”) by the Italian Competition Authority (“ICA”) last February for violating Article 101 TFEU, the prohibition against anti-competitive agreements and concerted practices.
The ICA found Roche and Novartis jointly liable for colluding in order to impede the commercialisation of the cheap ophthalmic drug named Avastin, and to increase the sales of their much more expenses drug named Lucentis.
Avastin and Lucentis are two drugs used to treat some serious vascular eyesight conditions. The ICA held that Roche and Novartis tried to create an artificial distinction between the above drugs advising doctors and health services against using Avastin in the ophthalmic
market. This strategy was aimed at impeding the off-label use of Aventis notwithstanding independent comparatives studies sustained the equivalence of the two drugs in treating ophthalmic diseases.
In light of the above, the ICA held that such conduct falls within the prohibition in Article 101 TFEU as the agreement between Roche and Novartis allowed the said companies to allocate markets and fix prices, two serious restrictions of competition.
Roche and Novartis challenged the ICA’s decision before the IAC by stating that the off-label use of a pharmaceutical product is unlawful per se and that the distinction between Avastin and Lucentis was authorised by both the Italian Pharmaceutical Regulatory Authority (“IPRA”) and the European Medicines Agency (“EMA”).
However, quiet surprisingly, the IAC did not even consider the above mentioned arguments based on scientific analysis but focused only on the common strategy implemented by Roche and Novartis. In particular, the IAC found that the two pharmaceutical giants aimed to prevent the use of Austin to treat ophthalmic diseases and stated this sufficient to uphold the ICA’s decision.
In our view, the IAC’s decision is welcome in so far as it can help make the pharmaceutical sector more competitive and provide Italian healthcare sector with high cost savings. Nevertheless, the IAC’s reasoning is not completely satisfying. Roche and Novartis announced their intention to file an appeal before the Italian Supreme Administrative Court (“ISAC”) and we do expect that, this time, the scientific analysis defence will be part of the future ISAC’s decision.