On 23 January 2018, the European Court of Justice delivered its judgment on a request for a preliminary ruling by the Italian Council of State. The request concerned an agreement between Roche and Novartis to make public statements concerning the alleged lack of safety and efficacy of one of Roche's products which competed with a product licensed to Novartis (the Agreement). The Court of Justice found that such an agreement can, under specific circumstances, constitute a restriction of competition "by object".
Genentech, a subsidiary of Roche, developed bevacizumab (Avastin) and ranibizumab (Lucentis). Avastin was developed to treat certain types of cancer. Lucentis was specifically developed to treat ocular diseases. Genentech licensed Avastin to its parent Roche and, since Roche was not active in the ophthalmological field, it licensed Lucentis to Novartis.
Prior to the market launch of Lucentis in Italy, doctors started prescribing the oncological drug Avastin as a treatment for eye diseases, despite the fact that such use was not included in Avastin's marketing authorisation (off-label use). Given its lower price, the off-label use of Avastin continued well after the market launch of Lucentis.
The Italian Competition Authority (ICA) had found that, following the market launch of Lucentis, Roche and Novartis (the Parties) entered into an agreement with the aim to artificially differentiate between Avastin and Lucentis by exaggerating the risks associated with the off-label use of Avastin while claiming that Lucentis had a better safety profile. According to the ICA, these statements were made without sufficient scientific evidence. The Parties intended to use this Agreement to prevent the further expansion of Aventis in the ophthalmological field and to promote Lucentis instead. According to the ICA, the Agreement intended to unlawfully maximise the profits of the Parties by promoting the most expensive product, namely Lucentis. Consequently, the ICA found that the Parties had entered into a market-sharing agreement, which constitutes a restriction of competition "by object".
The Parties challenged the decision of the ICA before the Italian Council of State, which referred the case for a preliminary ruling to the Court of Justice. The key issue before the Court of Justice was whether an arrangement between competing undertakings to disseminate unconfirmed scientific information on the off-label use of one of their products, with the aim or reducing the competitive pressure exerted on the other product, could constitute a restriction of competition "by object".
The Court first established that medicines that have a marketing authorisation (MA) for a specific indication and medicines used off-label for the same indication can, under circumstances, actually compete in same relevant market.
Next, the Court found, siding with the Advocate General's opinion, that the Agreement could indeed be considered a "by object" restriction of competition. First, the Court emphasized that the responsibility to report any potential adverse effects to the authorities and consequently to professionals and the general public lies with the MA holder alone and not with another company marketing a competing product under a separate MA. In this case, it was not only the MA holder, i.e. Roche, that had been involved in the relevant communications but also Novartis. According to the Court, this provides an indication that the communications may not have been solely driven by objectives related to pharmacovigilance.
Secondly, the Court found that if the information shared by the Parties was misleading, then the Agreement should be considered a "by object" infringement. The Court held that such information should be considered as misleading if– in short – it was shared with the purpose of confusing the relevant authorities on the safety profile of Avastin so they would include in its summary of characteristics the alleged adverse reactions, which would then allow Roche to launch a communication campaign in which the safety risks could be exaggerated vis-à-vis doctors and the general public. The Court left this assessment to the Italian Court.
This case is important as it effectively marks the introduction of the doctrine of disparagement in EU competition law. Similar cases (see Sanofi-Aventis decision) have been pursued in France where the competition authority found – and courts have confirmed – that the dissemination of misleading information about a pharmaceutical product's characteristics can infringe competition rules.
This article was published in the Competition Law Newsletter of January 2018. Other articles in this newsletter:
- Qualifying dawn raid documents as 'in scope' or 'out of scope': marginal review by Belgian Court
- Highest German Court rules that ASICS's ban on using price comparison websites violates EU competition law