In a recent judgment from January 2018 the Court of Justice of the European Union (CJEU) confirmed that concerted provision of misleading information about the safety of a medicinal product can represent a restriction by object under Article 101(1) of TFEU, when such concerted practice is intended to artificially reduce competition to the advantage of another medicinal product.


In February 2014, the Italian Competition Authority (AGCM) ruled that the two pharmaceutical companies Roche and Novartis had conspired to communicate misleading information about the off-label use of the medicinal product Avastin®. More specifically, the companies had disseminated information on the lack of safety by off-label use of Avastin® for the treatment of eye diseases with the purpose of increasing the use (within indication) of the medicinal product Lucentis® for treatment of same diseases.

Both Avastin® and Lucentis® were developed by the US based company Genentech, which by way of a licensing agreement had entrusted the commercial exploitation outside of USA of the two medicinal products to Roche and Novartis respectively. Avastin® was marketed by Roche for use in treatment of cancer, and Lucentis® by Novartis for use in treatment of eye diseases. Before Lucentis® was marketed in Europe, physicians had started prescribing the cancer drug Avastin® off-label to their patients with eye diseases. This off-label use of Avastin® spread worldwide, and, given a lower unit price, the off-label use of Avastin® continued even after Lucentis® was put on the market.

Following this, Roche and Novartis supposedly agreed upon a joint arrangement with the aim of increasing the use of Lucentis® by reducing competition from Avastin® for treatment of eye diseases. Supposedly, the companies disseminated information, which put into doubt the safety of the off-label use of Avastin® and downplaying the scientific value of evidence to the contrary.

Article 101(1) of TFEU is the general EU law prohibition of anti-competitive agreements.

It prohibits all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within 

Further, Roche requested the European Medicines Agency (EMA) for amendment of the SmPC of Avastin® with a warning on the alleged safety risks connected to the off-label use of Avastin® for the treatment of eye diseases. Roche also requested to be granted leave to send HCPs a letter drawing attention to the alleged safety risks with the off-label use of Avastin®.

The AGCM found that such collusive conduct was a restriction of competition by object, within the meaning of TEUF art. 101 (1), and fined the companies accordingly with respectively EUR 90.6 million and 92 million. Following Roche and Novartis’ appeal of this decision, the court of appeal being the Council of State in Italy requested the CJEU for a preliminary ruling on the interplay between the regulatory framework for the placing of medicinal products on the market and EU competition law.

Defining the relevant market

For the purposes of application of Article 101 TFEU, the CJEU was asked whether the national competition authority may include medicinal products used off-label as part of the relevant market in addition to medicinal products authorized for the treatment of the diseases concerned.

Initially, the CJEU stated that the relevant product market comprises all products regarded as substitutable by the consumer by reason of their characteristics, their prices and their intended use. By assessing these factors, the competitive conditions and the structure of supply and demand on the pharmaceutical market should also be taken into consideration. In this regard, the CJEU noted that pharmaceutical products manufactured or sold illegally in principle should not be regarded as substitutable products. In the present case, neither of the medicinal products were manufactured or sold illegally, as the regulatory framework did not per se forbid off-label use of medicinal products as long as the conditions for off-label use were complied with. The fact that Avastin® had been frequently prescribed for the treatment of eye diseases, even though its marketing authorization (MA) did not cover such indication, revealed the existence of a relationship of substitutability between Avastin® and products authorized for such eye diseases, including Lucentis®.

On these grounds and for the purposes of application of article 101 TFEU, the CJEU found that medicinal products whose MA does not cover the treatment of a disease but is used for such purpose (i.e. off-label use) are substitutable with medicinal products authorized for the treatment of the same disease and may, thus, be included as part of the relevant market.

Restrictions of competition ancillary to the licensing agreement

The CJEU also considered the question, if the information dissemination arrangement between the parties would fall outside the scope of Article 101 (1) TFEU as an integral part of and therefore ancillary to the overall licensing agreement.

This question arose as the case law from the CJEU stipulates that commercially agreed restrictions which are not by themselves anti-competitive, do not infringe Article 101 (1) if the restrictions in question are objectively necessary to the implementation of the main activity to which it pertains and, in addition, is proportionate to the underlying objectives. With reference to this case law, Roche and Novartis argued that the dissemination of the allegedly misleading information was objectively  necessary  for implementing the licensing agreement (between Novartis and Genentech).

In this regard, the CJEU noted that concerted practice of Roche and Novartis would not qualify as being objectively necessary for the implementation of the licensing agreement based on the argument that the licensing agreement simply would be more difficult to implement or less profitable without such conduct. This was supported by the fact that the conduct concerned was agreed upon by Roche and Novartis years after the licensing agreement had been concluded.

On this basis, the CJEU found that Article 101 (1) TFEU must be interpreted as meaning that an arrangement put in place between parties to a licensing agreement regarding the exploitation of a medicinal product which, in order to reduce competitive pressure on the use of the product in question (i.e. Lucentis®), is designed to restrict the conduct of third parties promoting the use of another medicinal product (i.e. Avastin®), does not fall outside the application of that provision on the grounds that the arrangement is ancillary to the underlying licensing agreement.

Restriction of competition by object

Finally, the CJEU considered, if the joint arrangement between Roche and Novartis constituted a restriction of competition by object for the purposes of Article 101 (1) TFEU. The concept of restriction of competition by object is only applicable to arrangements between companies which entail a degree of harm to competition rendering it unnecessary to examine such arrangements’ effect on the competition.

When determining if an arrangement constitutes restriction of competition by object, three elements are taken into consideration, namely a) the content of the restrictive provisions of such arrangement, b) the objectives of the arrangement, and c) the economic and legal context of which the arrangement forms part. Further, the nature of the goods affected (in this case: medicinal products) as well as the EU rules on such are taken into account.

Under the EU rules on medicinal products, the holder of an MA is obligated – simply put – to inform the EMA of new information which might influence the evaluation of benefits and risks of the medicinal product in question. The MA-holder is responsible for the accuracy of documents and data provided to the EMA.

One may argue that Roche and Novartis acted in compliance with the applicable rules when they informed the EMA of the risks arising from the off-label use of Avastin® for the treatment of eye diseases. However, according to the decision of the AGCM the steps taken by the two companies were not to be considered as acts of compliance under the regulatory framework, as in fact the companies colluded with each other to manipulate the perception of the risks associated with the use of Avastin® by spreading an alarmist interpretation of the available data with the aim of discouraging the off- label use of Avastin® to increase sales of Lucentis®. In this regard, the CJEU noted that the obligations under the relevant EU regulatory framework rest with the MA holder and not with another company marketing a competing medicinal product covered by separate MA. Accordingly, the fact that Roche and Novartis, marketing competing medicinal products, colluded with each other with a view to disseminate information related solely to the product marketed by Roche indicates that the dissemination of information pursued objectives unrelated to obligations under the applicable regulatory framework. Additionally, it was questionable if the information reported to the EMA regarding the off-label use of Avastin® for the treatment of eye diseases complied with the obligation to report only complete and accurate information under the applicable EU rules.

In sum, the ECJ found that an arrangement between two parties marketing two competing medicinal products, which in a context of scientific uncertainty concerns dissemination to the EMA, to HCPs and to the general public of misleading information relating to the off-label use of one of those products, with a view to reduce the competitive pressure on the use of the other medicinal product, constitutes a restriction of competition by object for the purposes of Article 101 (1) TFEU.

To consider for the pharmaceutical industry

The judgment is of particular interest for stakeholders in the pharmaceutical industry for a number of reasons.

Pharmaceutical companies should, when commenting publicly on product safety or as part of their pharmacovigilance activity, keep this judgment in mind, particularly if the commenting on product safety relates to off-label use. Should the national authorities or courts confirm that any such information on product safety is misleading, the provision of information may not only constitute a violation of the regulatory framework applicable to the pharmaceutical sector, but it may also be sufficiently harmful to competition to qualify it as an infringement of competition law.

Further, it is worth noticing that the scope of an MA covering a medicinal product is not binding on local competition authorities, when the relevant market is to be defined, as prescribing practices of HCPs seem to prevail. Consequently, medicinal products both used off-label and within indication may belong to the same relevant market, if the products are substitutable.

The pharmaceutical sector should also take due note of the fact that anticompetitive arrangement ancillary to licensing agreements are solely exempted from antitrust enforcement if such arrangements are objectively necessary to the implementation of the main agreement and proportionate to its objectives. As a general observation; based on the judgment, it would appear to be a tough test to pass to meet the criteria for benefiting from this ‘ancillary’ exemption from the general prohibition of anti-competitive agreements.

Lastly, pharmaceutical companies should take due note of the willingness of competition authorities to apply and enforce the competition law rules against practices which on their face would appear to be matters of pharmaceutical regulation. As is well- known, the competition authorities have in the past intervened in relation to pharmaceutical settlement agreements as well as alleged abuses of the regulatory system (C-457/10 AstraZeneca) with very high fines imposed on pharmaceutical companies as a result. The present judgment confirms the willingness of competition authorities to intervene against what could be seen as wrong-doing and abuse of regulatory procedures.