Two major Swiss pharmaceutical companies are under fire in Italy after the country’s antitrust agency charged them with colluding on the sale of drugs. Novartis and Roche were found to have joined together to push the cost of their drugs higher, and actively worked together to exclude other cheaper drugs.

The two companies collaborated to push their Lucentis medications, which blocks growth of abnormal blood vessels. The treatment addresses age-related macular degeneration by blocking the growth of such blood vessels in the eye.

According to The Wall Street Journal, the Italian Competition Authority found Roche and Novartis in collusion for pushing doctors to purposefully exclude other less expensive drugs that perform similar treatments as Lucentis from the market.

Specifically, the antitrust organization found that Avastin — a drug from Roche that is older, cheaper, and used to treat the same diseases — was targeted by the companies to be falsely portrayed as more risky than Lucentis. Novartis and Roche created an “artificial distinction” since 2011 between Avastin and Lucentis to influence doctors’ prescriptions in favor of the latter, which is hundreds of euros more.

Together, the two companies will be fined the equivalent of $250 million. Novartis has reportedly stated it will appeal the decision. Roche officially stated, as reported by the New York Times, that the verdict “openly encourages and promotes the widespread unlicensed intravitreal use of Avastin contrary to the requirements of European and Italian regulatory law,” and that it “undermines the European regulatory framework designed to protect patient safety.”

Part of the core issue here is Italy’s off-label practice regulations which require pharmaceutical companies to only market drugs for illnesses for which they have been approved, while doctors can prescribe the drugs that have won approval for any disease they see fit. Novartis claims that the verdict runs contrary to this regulation. This case as it stands, even without appeal, could have ramifications for Europe’s pharma-heavy markets.


Further reading:

Novartis cancer drug not innovative enough for patent, India Supreme Court rules

Litigation: Raising the bar: Recent developments in antitrust class actions

Predicting Colors with emerging trends in arbitration clauses and class actions