Novartis, Roche Stumble in Fight of Italian Antitrust Fines

(CN) – Europe’s highest court dealt a blow Tuesday to drugmakers Novartis and the Roche group, which are fighting antitrust fines of more than $110 million in Italy.

Italian regulators imposed the two fines in 2014 after determining that the companies had created an artificial differentiation between the products Lucentis and Avastin.

While Lucentis is authorized for the treatment of eye diseases, Avastin is authorized only for the treatment of tumorous diseases but is frequently used to treat eye maladies because its price is lower than that of Lucentis.

Roche subsidiary Genentech makes both of the drugs, but Lucentis is licensed to Novartis for marketing purposes, while Avastin is marketed by Roche.

Italy’s competition authority determined that the national health service faced about $55 million in extra costs because Novartis and Roche manipulated the perception of the two products, specifically the safety of Avastin in ophthalmology, to drive demand for Lucentis.

After Roche and Novartis challenged the fines, a regional court in Lazio dismissed their actions, and Italy’s Council of State invited the European Court of Justice to address the issues of EU competition law in play.

The court’s ruling Tuesday says any conspiracy by Roche and Novartis to reduce the use of Avastin in ophthalmology and to increase the use of Lucentis might constitute a restriction of competition.

“Given the characteristics of the medicinal products market, it is likely that the dissemination of such information will encourage doctors to refrain from prescribing that product, thus resulting in the expected reduction in demand for that type of use,” the decision states. “The provision of misleading information to the EMA, healthcare professionals and the general public … also constitutes an infringement of the EU rules governing pharmaceutical matters giving rise to penalties.”

Roche and Novartis are both based in Switzerland. A spokeswoman for Roche said the company is aware of the European Court of Justice’s ruling today.

“Roche actions in Italy were in accordance with the requirements of the regulatory authorities,” Roche said in a statement.

“It is now up to the Consiglio di Stato, the highest ruling court in Italy, to apply this guidance and render its final verdict later this year,” she added.

A representative for Novartis said they are reviewing Tuesday’s ruling in detail.

“As proceedings are still ongoing, with the Italian State Council tasked to make final assessments, we can’t comment further at this time,” the representative added.

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