Restrictions of off-label use – an antitrust violation?

According to the opinion of the Advocate General, a medicinal product authorised for a particular indication and a medicinal product used off-label to treat the same indication belong to the same relevant product market irrespective of the lawfulness of the off-label use, provided there is effective demand-side substitutability between the products. The Advocate General also opined that collusion to disseminate scientifically unsupported and misleading information about the safety implications of off-label use may constitute a restriction by object and therefore violate competition law.

The supreme administrative court in Italy (Consiglio di Stato) has requested a preliminary ruling by the Court of Justice of the European Union (CJEU) in an antitrust case between the Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato, AGCM) and two pharmaceutical companies, F. Hoffmann-La Roche Ltd and Novartis AG. On 21 September 2017, Advocate General Henrik Saugmandsgaard Øe presented his opinion on how the CJEU should adjudicate the case (case no. C-179/16).

The background of the case was as follows. Genentech Inc., a company affiliated with Roche, had developed two medicinal products, AVASTIN (bevacizumab) and LUCENTIS (ranibizumab) in the course of a single research programme. Genentech had discovered that the inhibition of the protein vascular endothelial growth factor (VEGF) could be used in the treatment of certain types of cancer as well as in the treatment of a common eye disease known as age-related macular degeneration (AMD). Genentech developed the anti-VEGF antibody bevacizumab (AVASTIN) specifically for the treatment of certain types of cancer and the anti-VEGF antibody ranibizumab (LUCENTIS) specifically for the treatment of AMD. Genentech granted a license to its affiliate Roche to register and sell AVASTIN in Europe and a license to third-party company Novartis to register and sell LUCENTIS in Europe.

Roche obtained marketing authorisation for AVASTIN for cancer treatment. Approximately two years later, Novartis obtained marketing authorisation for LUCENTIS for the treatment of eye diseases. Despite not being authorised for this indication, there has been substantial off-label use of AVASTIN for the treatment of eye diseases in Italy and worldwide, before as well as after the granting of marketing authorisation for LUCENTIS. In Italy, off-label use of AVASTIN became the principal competitor of LUCENTIS.

In its decision, the AGCM held that Roche and Novartis had engaged in a multitude of concerted practices in order to achieve an artificial differentiation between AVASTIN and LUCENTIS, which the AGCM considered to be equivalent medicines in all respects for the treatment of eye diseases. According to the AGCM, the purpose of the concerted practices was to manipulate the perception of the risks involved in off-label use of AVASTIN in order to disincentivise such off-label use. AGCM stated that the companies had exaggerated the risks of off-label use, downplayed the value of scientific evidence to the contrary and alleged that LUCENTIS had a better safety profile. The AGCM considered that the concerted practices served to maximise the profits of both parties, as LUCENTIS was more expensive than AVASTIN and as Novartis would benefit from direct sales of LUCENTIS, while the Roche group would benefit indirectly from such sales through royalties received by Genentech under the license agreement with Novartis.

The AGCM’s decision was appealed and the supreme administrative court requested the CJEU’s clarification of three main questions, namely (i) whether Genentech and Novartis could be regarded as competitors under the license agreement (which may be relevant for the application of the prohibition against restrictive agreements as set out in Article 101 TFEU), (ii) whether a medicinal product authorised for an indication and a medicinal product used off-label for the same indication could belong to the same relevant product market and (iii) whether the information disseminated by Roche and Novartis concerning risks of off-label use could be deemed to be restrictive of competition even though the scientific debate concerning such risks had not been decided at the time.

The answer to the first question is outside the scope of this commentary.

As regards the second question, the Advocate General noted that the AGCM had defined the relevant product market as including all products for the treatment of eye diseases (or, more specifically, for the treatment of ocular vascular pathologies) and that the question was whether or not AVASTIN belonged to that market. The Advocate General reminded us that a relevant market comprises all products which consumers regard as substitutable by reason of their characteristics, prices and intended use. The decisive question is whether there exists effective demand-side substitutability. If such substitutability does in fact exist between an authorised product and a product used off-label, then those products belong to the same relevant product market irrespective of the lawfulness of prescribing, marketing and using medicinal products off-label.

As regards the third question, the Advocate General noted that this question was based on the disputed premise that it was scientifically uncertain whether the safety and efficacy profiles of AVASTIN used off-label and LUCENTIS were equivalent. The Advocate General answered the question by stating that it constitutes a restriction by object under Article 101(1) TFEU if two companies collude to disseminate scientifically unsupported allegations that one medicinal product is less safe than another medicinal product, provided that those allegations are misleading. In this context, the Advocate General stressed that it is not for Roche and Novartis (but rather the competent authorities or courts) to take action to remove competitive pressure from a potentially illegal source. Moreover, the Advocate General pointed out, Roche and Novartis had no reason to act in concert. If Roche – whose product was used off-label – was concerned about the safety implications of the off-label use, then Roche could have acted unilaterally.

It remains to be seen whether the CJEU will follow the opinion of the Advocate General.