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EU court advised on how to consider 'off-label' drugs when defining pharmaceutical markets for competition law purposes

Pharmaceutical products do not need to be specifically authorised for treating particular diseases to be considered as rivals to products formally licensed for such purposes to be considered as active in the same market, an adviser to the EU's highest court has said.

Drugs used on an 'off-label' basis can be considered to be in direct competition to the authorised products even if there is uncertainty over the safety of their use in that context, advocate general Henrik Saugmandsgaard Øe said in a new opinion issued for the Court of Justice of the EU (CJEU).

Defining the scope of markets is an important part of the EU's competition law regime, as it is in particular markets that the actions of businesses are assessed for compliance with competition rules.

Saugmandsgaard Øe's non-binding opinion was issued in a case that has been referred to the CJEU from a court in Italy where drugs giants Roche and Novartis are challenging an earlier ruling that they breached competition laws by seeking to influence demand for two drugs used to treat the eye disease 'wet age-related macular degeneration' (AMD).

Novartis owns one-third of the shares of Roche. Novartis is authorised to market Lucentis, a drug developed to help treat AMD, in the EU. Similarly, Roche is authorised to market Avastin for the treatment of cancer in the EU. Both companies have the right to exploit the rights in the products under licensing agreements with Genentech, a subsidiary of Roche.

However, some medical practitioners found that patients with both cancer and AMD saw improvements to their health in respect of their AMD after being administered with Avastin. This development, coupled with the fact that Avastin cost more than 10 times less than Lucentis, led doctors around the world to prescribe Avastin for treating AMD on an 'off label' basis and meant Avastin became the main rival drug to Lucentis in the market, according to the advocate general's opinion.

The use of Avastin as an alternative to Lucentis in the treatment of AMD was challenged by Novartis and Roche, however, who cited concerns about the potential risk of infection that could arise from breaking down large vials of Avastin into smaller doses for intravitreal use – injection of the drug into the eye.

The European Medicines Authority (EMA) updated the summary of product characteristics for Avastin with "certain special warnings and precautions for use relating to the intravitreal use" of the drug, and this prompted Italy's national health service in 2012 to remove Avastin from its list of permitted 'off-label' medicines for the treatment of AMD.

In 2014, the Italian competition authority, the Autorità Garante della Concorrenza e del Mercato (AGCM), fined Novartis and Roche a total of approximately €180 million over an agreement they said was designed to influence demand in favour of Lucentis over Avastin and thus maximise profits.

The regulator said the agreement was "designed to achieve an artificial differentiation of the medicinal products Avastin and Lucentis by manipulating the perception of the risks associated with the use of Avastin in the field of ophthalmology", according to the advocate general's opinion. The regulator said the companies exaggerated the risks of using Avastin for treating AMD and portrayed Lucentis' safety profile in more favourable terms, it said.

However, Roche and Novartis challenged the Italian regulator's enforcement action before the Council of State in Italy, which has asked the CJEU to help it interpret EU law so as to rule on the appeal.

Among other things, the Council of State asked the CJEU to clarify if off-label drugs can be said to be in competition in the same market to products for which marketing authorisation in respect of the treatment of particular diseases have been granted.

Advocate general Saugmandsgaard Øe said the CJEU should rule that off-label drugs can be considered to be in the same market as products for which marketing authorisation is granted, under EU competition rules that prohibit anti-competitive agreements.

He said: "The relevant product market comprises all those products which are regarded by consumers as interchangeable or substitutable, by reason of their characteristics, their prices and their intended use. In the pharmaceutical sector, the content of marketing authorisations for medicinal products is not necessarily decisive in the determination of the relevant product market."

"In particular, the fact that the marketing authorisation for a medicinal product does not cover certain therapeutic indications does not preclude that medicinal product from forming part of the market for medicinal products used for those indications, provided that it is actually used interchangeably with medicinal products whose marketing authorisation covers those indications," he said.

"That is true even where there is uncertainty regarding the compliance with the applicable regulatory framework for the prescribing and marketing of medicinal products with a view to their use for therapeutic indications and by methods of administration not covered by their marketing authorisations," the advocate general said.

Saugmandsgaard Øe said that practices intended to emphasise that a medicinal product is less safe or less effective can be regarded as a restriction of competition 'by object', and therefore a breach of EU competition law, "where those allegations are misleading". He said it should be for national courts to verify whether that is the case.

A formal judgment from the CJEU in the case is not anticipated for a number of months. Though they are followed by the CJEU in the majority of cases, opinions of advocates general are not binding,.

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