AGCM

PRESS RELEASE

DRUGS: ANTITRUST APPLIES SANCTIONS TO ROCHE AND NOVARTIS FOR A SIGN THAT HAS CONDITIONED SALES OF MAIN PRODUCTS INTENDED FOR THE CARE OF SIGHT, AVASTIN AND LUCENTIS. WITH FINES OF MORE THAN € 180 MILLION

The two groups agreed unlawfully to hinder the spread of the use of a very inexpensive drug, Avastin, to treat the most common pathology of vision among the elderly and other serious eye diseases, in favour of a much more expensive product, Lucentis, differentiating the two products artificially. For the health service, the agreement resulted in an additional outlay estimated at more than 45 million euros in 2012 alone, with possible further future costs up to more than 600 million euros per year. Novartis and Roche suffered penalties, respectively, of 92 and 90.5 million euros.

The Competition Authority, at a meeting on 27 February 2014, decided that the groups Roche and Novartis put in place an agreement which restricts competition, contrary to Community competition law, in the market for drugs for the treatment of severe vascular diseases of the eye, punishing the two groups with more than 180 million euros.

Among the diseases included in the inquiry there stand out senile macular degeneration, the primary cause of blindness in industrialised countries and, from which, in Italy alone, one million people are at risk. According to the Antitrust, the agreement had as a possible consequence, among other things, greater difficulty in treatment options for many patients and an increase in the cost to the health authorities estimated at 45 million euros in 2012 alone, with possible higher future costs of up to more than 600 million euros per year.

The investigation was initiated in February 2013 after reports received from Aiudapds, an association of private clinics, and the SOI-Italian Society of Ophthalmology: the Region of Emilia-Romagna and the association of consumers Altroconsumo successfully applied to participate in the proceedings.

From the documentation obtained, also thanks to the collaboration of the Competition Group of Special Market Protection Unit of the Guardia di Finanza, it appeared that the parent company Roche and Novartis, through their Italian branches, have planned since 2011, an artificial differentiation of the drugs Avastin and Lucentis, presenting the first as more dangerous than the second and thus conditioning the choices of doctors and health services.

Avastin is a product that has been registered for the treatment of cancer but by the twenty-first century has been used worldwide also for the treatment of widespread ocular vascular diseases; Lucentis is a drug based on a molecule totally similar to that of Avastin but specially registered (by Genentech in the USA and by Novartis in the rest of the world) for visual pathologies up to then treated with Avastin. The price difference for one injection is significant: Avastin costs up to 81 euros, while the price of Lucentis is currently approximately 900 euros (previously, however, the price was more than 1700 euros).

Given the risk that the ophthalmic applications of Avastin, sold at a much lower price, interfered with the commercial development of the much more expensive Lucentis, Roche and Novartis put in place a complex collusive strategy, which aimed at engendering among physicians and more in general, the public, fears about the safety of the first. These activities have continued and were indeed intensified when an increasing series of comparative independent studies, which therefore could not be controlled by companies, definitely showed the equivalence of the two drugs.

The actions of the businesses find their economic explanation in the relations between the Roche and Novartis groups: Roche, in fact, has interest in increasing the sales of Lucentis because through its subsidiary Genentech - which developed both drugs - gets over them relevant royalties from Novartis. The latter, for its part, in addition to gaining from increased sales of Lucentis, holds a significant stake in Roche, more than 30%. It was not instead held liable for the offence, the subsidiary of Roche, the California company Genentech.

In consideration of the particular gravity of the offence, the Authority imposed a penalty of 92 million euros on the Novartis group and a penalty of 90.5 million euros on the Roche group, a total of over 180 million euros.

Rome, 5 March 2014