Italian Ruling on Roche and Novartis Resonates Across Europe

Mar 23, 2014

Roche and Novartis have been fined in Italy on pricing conspiracy charges, fueling a wider debate across Europe about expenditure, efficiency and off-label prescribing. Reflector reports.

The familiar European battle between drug expenditure and drug efficiency has been given new impetus by the judgement of a competition court in Italy. The Autorità Garante della Concorrenza e del Mercato announced in early March fines of more than $200 million on the local subsidiaries of Roche and Novartis, for conspiring to keep up drug prices by discouraging use of cheaper alternatives.

Since then, the ruling has resonated right across Europe, dragging regulators, lawyers, international officials and consumer associations into a complex fight over money and medication. But this is no routine discussion about generic substitution, where savings might amount to as much as half or three quarters of the value of the original product. Here it is not a matter of safety versus something so insignificant as cents (whether they be Euro cents or US dollar cents). The cost contrast here between the two products is closer to $50 versus $2000.

Following an appeal from local health authorities and consumer groups in Italy, the Italian competition authority concluded that the companies were operating a cartel to limit competition on Novartis' Lucentis eye treatment, by actively deterring use of Roche's, Avastin, which has been shown to have some potential in ophthalmology (and at a much lower price), although it is authorized only as an anti-cancer drug. The Autorità took the position that if the cheaper treatment could be effective in age-related macular degeneration, it should be available for use in preference to the more expensive alternative. Off-label prescribing of Avastin could permit savings of as much as $750 million a year to Italy's health service, it says.

The two companies deny any attempt to manipulate the market, and dismiss reports from the competition authority of incriminating correspondence revealing "specific strategies to artificially distinguish the two products and to unduly influence the choice of doctors and healthcare systems". But questions over whether the companies colluded or not have paled into insignificance as the bigger issue has taken centre stage in Europe: can national authorities require off-label prescribing in order to save money? And if they cannot actually require it, should they nonetheless encourage it in the interests of economy?

For the Autorità, the answer is clear. "An increasing number of independent, comparative studies ...definitively demonstrated the equivalence of the two drugs", it said in its ruling. The Italian health minister, Beatrice Lorenzin, has recently indicated interest in allowing reimbursement of Avastin in ophthalmology, and the ruling has prompted parliamentary questions urging just such a review of policy.

Consumers organizations weigh in

Consumer organizations too, in Italy and at European Union level, are unambiguous in their support for wider off-label prescribing. The Italian consumer association was a party to the call for an investigation into Roche and Novartis, and the European consumers bureau, BEUC, has been energetic in urging intense European scrutiny of the issue. Monique Goyens, its director-general, said: “The unethical tactics of Roche and Novartis to block the cheaper alternative at the expense of consumers are unacceptable. BEUC condemns such anti-competitive practices that put profits before consumers' health.” She has written to the Commission — which is responsible for competition policy across the EU — to launch an investigation “to evaluate consumer detriment in all those member states where Avastin and Lucentis are sold”. At a time when many member states were facing difficulties in paying for medicines and ensuring access to treatments, restrictive practices of this sort are “even more deplorable”, she said.

There are indeed studies that claim some equivalence. The two products are equally effective to treat age related macular degeneration, according to a report from the Comparison of Age-related Macular Degeneration Treatments Trials (CATT) research group in ophthalmology, in July 2012, and the results of the IVAN randomized controlled trial in alternative treatments to inhibit VEGF in age-related choroidal neovascularisation, published in The Lancet in July last year.

Goyens also claims adds that "the European Medicine Agency committee for medicinal products for human use (CHMP) agreed that 'detailed safety information provided from the CATT and IVAN studies is reassuring and no evidence can be provided that bevacizumab is systemically more unsafe than ranibizumab and vice-versa'," in its Avastin report in 2012.

But not everyone embraces the concept of off-label prescribing — or the implications of the ruling by the Autorità — so warmly. The Italian drug regulator, AIFA, described the decision as “a landmark ruling for all of Europe”, and expressed caution over the possible safety implications. It said the case highlights “a global problem which has forced the European Medicines Agency and all the European agencies to study the risks associated with large-scale off-label use of drugs which have not been researched for specific therapeutic indications”.

Off-label prescribing a common practise

The practice of off-label prescribing certainly exists, and there is evidence that in some areas of therapy it is common. A recent paper from the School of Pharmacy at University College London noted that "the medically sanctioned supply of drugs for unlicensed indications continues to be widespread in fields ranging from paediatric medicine to pain management, psychiatric care and cancer treatment."

It cites the use of tricyclic antidepressants for treating conditions ranging from irritable bowel syndrome to neuropathic pain — and the acceptance by the UK health technology assessment body, NICE, of such practices, even in an unlicensed application. It also cites a NICE recommendation to doctors which says: "Consider offering sertraline first because it is the most cost-effective drug, but note that at the time of publication (January 2011) sertraline did not have UK marketing authorisation." But the overall tone of the paper (which was heavily funded by Bayer and Novartis) is cautious: "As and when cost saving...is the primary reason for using medicines for unlicensed indications, the legality of the latter is doubtful throughout the European Union", it says.

James Killick and Pascal Berge of the Brussels office of lawyers White & Case point out, in another recent paper, that medicines can be introduced in Europe only "once they have passed through a strict regulatory process, which aims to protect patient safety, and can only be used outside the limits of their indications under a few narrow exceptions". They too note that recent years have seen a trend among authorities towards promoting unauthorized medicines or medicines used outside the limits of their marketing authorisation on the ground that they are cheaper than the duly authorized drug. But their conclusion is clear: "The promotion of unauthorized medicines or medicines which have not been authorized for the disease in question is bad policy. It entails health risks."

The Commission is being cautious, too. For the moment, it is saying only that it has "taken note" of the Italian ruling. It recognizes that the issue is under discussion in other member states, and it is following those debates because it is "continuously monitoring developments in pharmaceutical markets in Europe".

But there will be no rush to judgement, because the Commission also has some responsibilities for safety in relation to the use of medicines. The Commission's director-general for health, Paola Testora-Coggi, wrote to AIFA after the ruling to express support for the national health agency's concerns over safety. She said off-label use "is a complex area", adding that the commission plans a study into the questions it raises.

So the issue rumbles on — but this longstanding question is being given a sharper edge by this episode in the Avastin/Lucentis debate, and that sharper edge is likely to cut through some of the hesitations that have so far precluded conclusions.