Concerted practices in the pharmaceutical sector



On 23 January 2018, the Court of Justice of the European Union (CJEU) published its judgment in F. Hoffmann-La Roche e and Others, on the interpretation of Article 101 of the Treaty on the Functioning of the European Union (TFEU) in the pharmaceutical sector.

The request for a preliminary ruling had been made in proceedings before the Italian Administrative Courts between Roche and Novartis on the one side and the Italian Competition Authority (ICA) on the other, regarding the financial penalties imposed by the latter for breach of Article 101 of the TFEU.

In 2014, the ICA had imposed fines on Roche and Novartis on the grounds that they had put in place an arrangement designed to achieve an artificial differentiation between the medicinal products Avastin and Lucentis, by manipulating the perception of the risks of using Avastin off-label in the field of ophthalmology. Both products are developed by US company Genentech, a subsidiary of Roche. Genentech entrusted the commercial exploitation of Avastin outside the US to Roche and entrusted Novartis with the commercial exploitation of Lucentis outside the US, by way of a licence concluded in June 2003.

Both medicinal products had been authorised by the European Commission and the European Medicines Agency (EMA). Lucentis is approved for the treatment of eye diseases, whereas Avastin, even though approved only for the treatment of certain tumours, is also frequently used to treat the same eye diseases as its price is lower than Lucentis.

According to the ICA, Roche and Novartis entered into a market-sharing agreement intended to disseminate information which gave rise to concerns regarding the safety of the off-label use of Avastin. Such practices continued and were intensified after it transpired that, according to several independent studies, the two products were equivalent, resulting in a shift in demand toward Lucentis.

In December 2014, the Regional Administrative Court of Lazio rejected the challenges brought by Roche and Novartis against the decision of the ICA. Roche and Novartis lodged an appeal before the Council of State. The Council of State decided to stay the proceeding and asked the Court of Justice whether Article 101 of the TFEU should be interpreted as meaning that a national competition authority may include in the relevant market, in addition to the medicinal products authorised for the treatment of a disease concerned, another medicinal product whose marketing authorisation (MA) does not cover such treatment but which is also used for that purpose. Also requiring an answer is whether the competition authority should consider if such off-label use complies with EU rules governing pharmaceuticals.

The referring court also asked whether the restrictions of competition agreed between the parties to a licensing agreement fell outside the scope of application of Article 101(1) TFEU, on the grounds that they are ancillary to that agreement. Finally, the Italian Court asked if the dissemination of information relating to adverse reactions resulting from the use of one of two competing products – for indications not covered by the respective MA – constituted a restriction of competition ‘by object’ according to Article 101(1) of the TFEU and if it could benefit from the exemption provided by Article 101(3) TFEU.

The Court of Justice first recalled that, in order to determine the relevant product market, all products and services which are regarded as interchangeable or substitutable by the consumer – by reason of their characteristics, their prices and their intended use – should be taken into account, as well as the competitive conditions and the structure of supply and demand on the market. In view of the specific features of competition in the pharmaceutical sector, medicinal products that may be used for the same therapeutic indications generally belong to the same market.

However, the fact that some pharmaceutical products are manufactured or sold unlawfully in principle prevents them from being regarded as substitutable with products manufactured and sold lawfully. In that case, Avastin was covered by an MA validly issued by the European Commission for the treatment of certain tumours, not for the treatment of eye diseases. According to the Court of Justice, Directive 2001/83/EC of the community code relating to medicinal products for human use prohibits neither the prescription of a medicinal product outside the indications laid down in its MA, nor its repackaging for off-label use, provided that they comply with certain conditions.

It is for the national courts or the competent authorities to verify that those conditions are satisfied. In that case, the ICA was not the competent regulatory authority. Moreover, the Court of Justice found that the competent authorities and courts had not examined whether the conditions for the repackaging and the off-label prescription of Avastin were unlawful and, therefore, the ICA could consider the two products belonging to the same market and thus as competing between them.

The Court also denied that the arrangement between Roche and Novartis could be justified as being ancillary to the licensing agreement between them, and therefore not falling within the scope of Article 101(1) of the TFEU. According to the Court of Justice, in order to determine whether a restriction can escape the prohibition laid down in Article 101(1) TFEU because it is ancillary to a main operation that is not anticompetitive in nature, it is necessary to enquire into whether that operation would be impossible to carry out in the absence of the restriction. In that case, the arrangement did not aim at restricting the commercial autonomy of the parties to the licensing agreement regarding Lucentis, but was designed to influence the conduct of third parties, and in particular of healthcare professionals, so that they would reduce the prescription of Avastin in ophthalmology for the benefit of Lucentis. Therefore, the arrangement could not be considered ancillary and objectively necessary for the implementation of the licensing agreement.

Regarding the question of whether the dissemination of information relating to adverse reactions resulting from the off-label use of Avastin could constitute a restriction ‘by object’, the Court of Justice recalled that the concept of restriction of competition ‘by object’ must be interpreted strictly and can be applied only to certain types of coordination between undertakings which reveal a degree of harm to competition that is sufficient for it to be held that there is no need to examine their effects and that, by their nature, can be regarded as being harmful to the proper functioning of normal competition.

In order to determine whether an arrangement can be considered a restriction of competition by object, the content of its provisions, its objectives and the economic and legal context of which it forms a part must be taken into account. In the pharmaceutical sector, account must be taken of the impact of the EU regulatory provisions on pharmaceutical products, which require that a product such as Avastin must be subject to a pharmacovigilance system under the control of the EMA and in coordination with the national authorities.

In the circumstances at issue, the ICA had found that the agreement between Roche and Novartis was aimed at creating an artificial differentiation between Avastin and Lucentis, by manipulating the perception of the risks associated with the off-label use of Avastin for the treatment of eye diseases through the dissemination of opinions that could give rise to concern regarding its safety, thereby influencing the therapeutic choices of doctors. The arrangement was also intended to disclose to the EMA information that could exaggerate the perception of the risks associated with such use in order to obtain the amendment of the summary of Avastin’s characteristics and to be granted leave to send healthcare professionals a letter drawing their attention to such adverse reactions.

According to the Court of Justice, the requirements for pharmacovigilance that might call for steps to be taken, such as the dissemination to healthcare professionals and the general public of information relating to the risks associated with the off-label use of a medicinal product, as well as the initiation of a procedure before the EMA with a view to including such information in the summary of characteristics of the product, rest solely with the holder of the MA for that medicinal product.

Therefore, the fact that two undertakings commercialising competing pharmaceutical products collude with each other with a view to disseminating information specifically relating to the product marketed by only one of them might constitute evidence that the dissemination of that information pursues objectives unrelated to pharmacovigilance. The disclosed information must be considered misleading when the national court finds that they aim at: (i) ensuring that any adverse reactions are mentioned in the summary of the product characteristics, and enabling the MA holder to launch a communication campaign aimed at healthcare professionals, patients and other persons concerned with a view to exaggerating that perception artificially; and (ii) emphasising, in a context of scientific uncertainty, the public perception of the risks associated with the off-label use. In that case, the Court of Justice found that such arrangements constituted a restriction of competition ‘by object’.

Finally, the Court of Justice found that a restrictive arrangement cannot be exempted under Article 101(3) of the TFEU if it does not meet the conditions required thereby, including the prohibition of imposing not indispensable restrictions. In that case, the dissemination of misleading information in respect of a medicinal product could not be regarded as ‘indispensable’ and, therefore, an arrangement intended to disseminate such misleading information cannot be exempted.


Roberto A. Jacchia is a founding partner and Davide Scavuzzo and Sara Capruzzi are associates at De Berti Jacchia Franchini Forlani. Mr Jacchia can be contacted on +39 02 725 54 1 or by email: Mr Scavuzzo can be contacted on +32 2 742 0138 or by email: Ms Capruzzi can be contacted on +32 2 742 0138 or by email:

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Roberto A. Jacchia, Davide Scavuzzo and Sara Capruzzi

De Berti Jacchia Franchini Forlani

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