Source: https://trustinip.com/cjeu-c-179-16-hoffman-la-roche-infringement-of-pharmacovigilance-obligations-may-give-rise-to-eu-competition-law-liability/
Timestamp: 2018-05-26 00:00:32
Document Index: 135224986

Matched Legal Cases: ['CJEU ', 'CJEU ', 'CJEU ', '§ 51', 'CJEU ', '§ 52', '§ 62', 'CJEU ', 'CJEU ', '§ 71', 'CJEU ', 'CJEU ', '§ 78', 'CJEU ', 'CJEU ', 'CJEU ']

﻿ CJEU (C-179/16, Hoffman-La Roche): infringement of pharmacovigilance obligations may give rise to EU competition law liability
January 29, 2018 January 29, 2018 Marco Lo BueEurope, Competition Law
According to the Italian Competition Authority, the companies colluded to artificially reduce the demand for Avastin – a drug marketed by Roche for the treatment of cancer but also prescribed off-label by medical practitioners in the treatment of age-related macular degeneration (“AMD”) – to the advantage of Lucentis, a drug manufactured by Novartis and officially approved for the treatment of AMD, but ten times more expensive than Avastin.
The parties allegedly had an incentive to implement this strategy since Roche would have earned royalties through its subsidiary Genentech, licensor of the patent covering Lucentis, and Novartis’ would have earned directly from the sales of Lucentis and from its 33% shareholding in Roche.
In order to influence the demand for Avastin, the parties supposedly agreed upon the following restrictions:
the production and dissemination of opinions which called into doubt the safety and the efficacy of the off-label use of Avastin, downplaying the value of scientific evidence to the contrary;
the request by Roche, against its interest, to the European Medicines Agency (“EMA”) for an amendment to the summary of Avastin’s characteristics in order to warn the public (doctors and patients) on the alleged risks connected to the off-label use of the drug and get the medicine removed from the list of the reimbursed drugs;
the request by Roche of an authorisation to send a “direct healthcare professional communication” (“DHPC”) to medical practitioners illustrating the amendments to the summary of Avastin’s characteristics.
Is the scope of marketing authorisations (“MA”) binding on competition authorities for the purpose of defining the relevant market?
The Consiglio di Stato asked the CJEU whether a medicinal product used off-label and another one that has received an MA in respect of the same therapeutic indications can be considered substitutable and have to be included in the same relevant market.
The CJEU initially draws attention to the fact that “substitutability is not assessed solely in relation to the objective characteristics of the products”, and that “the competitive conditions and the structure of supply and demand on the market must also be taken into consideration” (§ 51).
Having said that, the CJEU clarifies that pharmaceutical products manufactured or sold illegally cannot be considered substitutable both on the supply side, because of all the risks to which they expose the manufacturers of those products, and on the demand side (i.e.: prescribing medical practitioners), due to the risk to public health (§ 52). However, the Court notes that although it is not for the national competition authorities to verify compliance of drugs with the regulatory framework, in the present case the pharmaceutical regulators and the national courts had found no evidence that the conditions under which Avastin was repackaged and prescribed were unlawful (§ 62).
In light of the above, the CJEU concludes that a drug covered by an MA and a drug prescribed off-label for the treatment of the same disease have to be included in the same relevant market in so far as they are interchangeable and compliant with the applicable provisions governing their manufacture and marketing.
Should a restriction of competition agreed between the parties of a patent licensing agreement (i.e.: Genentech and Novartis) fall outside the scope of article 101 TFEU if the constraint is ancillary to that agreement?
In providing a response to this question, the CJEU recalls that, as previously clarified in Mastercard, a restriction of the commercial autonomy of a participant to an operation that is not anticompetitive in nature is not prohibited by article 101 TFEU if it is objectively necessary to the implementation of the main agreement and proportionate to the objectives of the contract. “The fact that that operation is simply more difficult to implement or even less profitable without the restriction concerned cannot be deemed to give that restriction the objective necessity required in order for it to be classified as ancillary” (§ 71).
Having said that, the CJEU notes that the dissemination of allegedly misleading information agreed upon by the two parties was not aimed at reducing the commercial autonomy of Genentech or Novartis, but rather the conduct of third parties (i.e. medical practitioners) to eventually influence the demand of Avastin, and therefore it could not be considered objectively necessary for the implementation of the licensing agreement since it was agreed upon several years after its conclusion and was not even expressly provided for in the agreement.
Should a concerted practice intended to emphasise in a context of scientific uncertainty that a drug is less safe or efficacious than another be regarded as a restriction of competition by object?
In this regard, the CJEU recalls that a restriction of competition by object occurs when an arrangement reveals a sufficient degree of harm to competition to render the examination of the effects superfluous. In order to determine whether an arrangement entails a restriction of competition by object, regard must be had to (i) the content of the agreement, (ii) the objectives it seeks to attain and (iii) the economic and legal context in which it is concluded, with particular consideration for the nature of the products or services at issue and the conditions of functioning of the market (§ 78-80).
Having said that, the CJEU explains that in the pharmaceutical sector the impact of the EU regulatory framework has to be taken into account when assessing the economic and legal context. In particular, under the pharmacovigilance system set by EU law, the holder of the MA is obliged to supply to the EMA, the Commission and the Member States any new information which might influence the evaluation of the benefits and risks of the drug concerned and must ensure that that information to the public is presented objectively and is not misleading (article 16(2) and 24(5) of Reg. n. 726/2004).
Applying the above to the present case, the CJEU observes that since the submission of new information to the EMA rests solely with the holder of the MA, the fact that two undertakings marketing competing drugs colluded with each other to disseminate information relating to the product marketed by only one of them might constitute evidence of anticompetitive collusion. Furthermore, Roche’s request to include the alleged side effects arising from the off-label use of Avastin in the list of adverse reactions was not granted by the competent pharmaceutical authority, and this circumstance might entail a clue of the artificial exaggeration pursued by the parties.
In sum, the CJEU provides criteria for the referring court to assess whether the information provided by the parties to the competent authorities were misleading. In particular, information are deemed to be misleading if they lack completeness and accuracy, their purpose is to confuse the authorities and they emphasise in a context of scientific uncertainty the public perception of the risks associated to the off-label use of a drug.
Should the misleading nature of the information be confirmed, that conduct would constitute not only an infringement of the regulatory framework applicable to the pharmaceutical sector, but it would also be sufficiently harmful to competition to render an examination of its effects superfluous.
All in all, this ruling provides the stakeholders in the pharmaceutical sector with some cornerstones in relation to antitrust compliance:
the scope of the MA will not bind the competition authorities in the definition of the relevant market, but attention will be paid to the prescribing practises by medical practitioners;
anticompetitive arrangements ancillary to a licensing agreement will be exempted from antitrust enforcement only if they are objectively necessary to the implementation of the main agreement and proportionate to its objectives;
the submission of misleading information to emphasise in a context of scientific uncertainty that a drug is less safe or efficacious than another may entail a restriction of competition by object and trigger fines up to 15% of the company’s turnover (10% antitrust sanction and 5% pharmaceutical sectorial penalties).
Tagged antitrust, Italy, competition law, patent, Marco Lo Bue, Licensing, CJEU, pharmaceutical law, AGCM, roche, novartis, avastin, lucentis, pharmacovigilance, restriction by-object, misleading information