Hoffman-La Roche – Novartis dispute over Avastin drug referred back to the ECJ for the second time

To recall, in 2014, the Italian Competition Authority (“AGCM”) found Hoffman La Roche and Novartis to be in violation of Article 101 TFEU and fined them 182.5 million euros. The two pharma companies were indeed considered to have put in place an anti-competitive agreement aimed at favouring the medicinal product Lucentis over its cheaper competing product Avastin, by way of manipulating the perception of the risks associated to Avastin. 

Both Hoffman La Roche and Novartis appealed the AGCM decision, firstly, in front of the Lazio Regional Administrative Court (“TAR”), which dismissed their appeals, and, subsequently, in front of the CdS, which, by way of a preliminary ruling ex Article 267 TFEU, asked the EU Court of Justice (“ECJ”) to provide guidance on how to interpret Article 101 TFEU, particularly with reference to the definition of the relevant market in the case at stake. In January 2018, the ECJ ruled that the collusive agreement between Hoffman-La Roche and Novartis could constitute a restriction of competition “by object”, as it created a “misleading perception of the risks associated to the use of the off-label product”. The EU judges indeed regarded the two products as belonging to the same relevant market, thus being competing medicinal products, in so far as the national courts and authorities have not examined whether the repackaging conditions of the off-label drug, Avastin, were unlawful. 

Following the interpretation given by the ECJ, the CdS upheld the AGCM decision, by way of a final ruling which should have put an end to the dispute. 

However, the two pharma companies challenged the CdS ruling, arguing that the AGCM decision is in violation of the interpretation rendered by the EU judges, as it did not carry out the assessment related to authorities’ opinions in relation to the re-packaging of an off-label drug (such as Avastin) and to the misleading nature of the information given about the Avastin drug. 

Based on the ECJ wording, it was up to the national courts to determine whether such information was misleading, if, in a context of scientific uncertainty, it was such to create confusion for the European Medicines Agency (“EMA”) and for the European Commission and if it emphasised the public perception of the risks of using Avastin. According to the two pharma companies, this analysis was not carried out by the AGCM and, therefore, its decision should be considered as going against EU law and thus, revoked. 

With respect to the revocation measure under Italian administrative law, the two claimants also argue the existence of a jurisdictional gap in the national procedural administrative framework, as a final ruling of the CdS, based on the current national provisions, cannot be challenged on the ground of being in violation with a contrasting decision issued by the ECJ. 

Based on these arguments, the CdS found it necessary to refer, for a second time, the question to the ECJ. In particular, the national judges asked the following questions to their EU counterparts: 

• If the assessment of the correct application of a preliminary ruling issued by the ECJ, by means of a ruling against which an appeal cannot be brought within the national procedural framework, should be carried out by national judges or by the EU judges themselves;
  
  
• If the AGCM decision goes against the interpretative guidance given by the ECJ with relation to: 
  • the inclusion in the relevant market of an off-label drug without taking into account the opinions of authorities and courts in relation to the re-packaging conditions of the off-label drug itself; and
  • the assessment of the misleading nature of the information provided about the off-label drug; 
    
    
• If the Italian administrative procedural framework is in conflict with EU law as far as it does not allow the use of the procedural remedy of the revocation to appeal CdS decisions that are deemed to be in violation with ECJ decisions. 

The preliminary questions at stake may therefore have relevant implications with regards not only to the relationship between national courts and EU judges, but also to the right of companies to challenge, in front of the ECJ, national decisions that have been issued following a pronouncement by the EU Court itself. 

For further information contact Federico Marini Balestra