In 2020 the French competition authority (AdC) imposed fines on Novartis, Roche and Genentech for alleged abusive activities in relation to treatments for wet age-related macular degeneration (AMD) (see, VBB Life Sciences News and Insights of  9 September 2020).  The decision found that the parties held a collective dominant position on the relevant market, and abused this position through the following actions:

• Denigration Campaign to HCPs.  Novartis allegedly mounted a communication campaign targeting ophthalmologists and key opinion leaders, seeking to explain that Avastin® should not be used for treating eye diseases at the expense of Lucentis®. According to the AdC, this campaign did not amount to a bona fide presentation of Avastin® in the interest of public health, but was rather a self-serving tactic to protect the revenues received by the parties from the supply of the higher-priced Lucentis®.

• Blocking Tactics and Misleading & Alarmist Messages to Public Authorities.  According to the AdC, Roche delayed the supply of samples necessary for a study to evaluate the use of Avastin® for AMD.  In addition, Novartis, Roche and Genentech allegedly directed a series of “misleading and alarmist” messages at various public authorities, thus delaying a critical head-to-head trial comparing Avastin® and Lucentis® and at one point securing the prohibition of the off-label use of Avastin®.

On appeal, the Paris Court of Appeal annulled the AdC’s decision in February 2023, holding that the AdC had failed to properly take into account the relevance of the French Bertrand Law, which limited the ability of doctors to prescribe Avastin® off label for AMD, in competition with Lucentis®.  The Bertrand Law was introduced during the period of the alleged infringement as a result of the (unrelated) Mediator scandal where a medicine prescribed off label had been found to have caused significant health problems.  In its judgment, the Paris Court of Appeal also indicated that the parties had the right of freedom of expression, and it was allowable for them to contribute to the public debate (in a accurate and measured manner) concerning the off-label use of Avastin® for the treatment of AMD.

On further appeal, the French Supreme Court (Cour de Cassation) has now annulled the judgment of the Paris Court of Appeal, reinstated the AdC’s decision, and remanded the case back to the lower court for further proceedings.  The French Supreme Court and the Paris Court of Appeal reached different conclusions on three central issues:

• Did Avastin® (potentially) compete with Lucentis®?  Following the introduction of the Bertrand Law, the Paris Court of Appeal found that Avastin® could not lawfully be prescribed off label for AMD in competition with Lucentis®, and thus the parties alleged activities to prevent off-label use of Avastin® were not capable of harming competition.  On appeal, the French Supreme Court held that the lower court erred by failing to also consider whether Avastin® was a potential competitor of Lucentis® (e.g. due to the ongoing efforts to generate data and authorize use of Avastin® for AMD), and thus whether the parties alleged anticompetitive activities were capable of harming such potential competition.

• Freedom of expression.  In its judgment, the Paris Court of Appeal cited the European Convention of Human Rights (ECHR) and noted that the parties had the right to exercise their freedom of expression.  Consistent with this right, the Paris Court held that Novartis, Roche and Genentech could legitimately contribute to the public debate concerning the off-label use of Avastin® in an accurate and measured manner, particularly in the context of scientific uncertainty (as Avastin® had not been systematically studied or approved for the treatment of AMD).On appeal, the French Supreme Court held that the lower court applied the incorrect legal standard.  While the ECHR provides significant protections for freedom of expression on political matters, the Court noted that governments have significant margin to regulate freedom of expression in the commercial field.  The Supreme Court clarified that the issue of whether the parties acted in violation of the law on abuse of dominance should be assessed solely based on the terms of that law, and the lower court should thus have investigated whether Novartis’ communications pursued an anticompetitive objective.  If the court finds an abuse, the defending parties may then seek to avoid sanctions if the activities fall within their rights of freedom of expression under the terms of the ECHR.

• No actual harm to competition, but still an abuse.  The Paris Court of Appeal held that Roche’s delay in providing samples necessary for a study to evaluate the use of Avastin® for AMD did not constitute an abuse because it would not have had any anticompetitive effect due to the later introduction of the Bertrand Law.  On appeal, the Supreme Court held that the lower court erred in considering the impact of the Bertrand Law, as it should have instead assessed whether, at the time of Roche’s delay in providing samples, such delay was capable of harming competition, even if anticompetitive effects ultimately did not occur due to the later introduction of the Bertrand Law.

The French Supreme Court thus annulled the judgment of the Paris Court of Appeals, and sent the case back to the lower court for further assessment in line with its judgment.

Key Takeaways

While the case is not yet final, the present judgment highlights the strict legal standards faced by companies holding a dominant market position.

• Extreme caution is required for any statements about competing products.  The present judgment, together with the recent decision by the European Commission finding against Teva, indicates that any statements about competing products to HCPs, payors or public authorities could face strict competition law scrutiny.  Care is required to ensure that all such statements are correct, complete, measured, adequately supported and (when relevant) solely addressed to the appropriate regulatory authority.
• Actions impacting potential competition may also constitute an abuse.  The present judgment reflects a broader trend of competition authorities and courts expanding the application of the competition laws beyond just competition between marketed products.  Authorities and courts are increasingly focused on competition for innovation as well as competition from potential entrants still in development or awaiting approval.  Companies assessing future plans and strategies for competition law compliance should also carefully consider any impact on potential competition.
• Exceptions to the competition laws may be defined narrowly.  In this case, the French Supreme Court annulled the lower court’s judgment because the lower court attributed too much importance to the introduction of the Bertrand law and the parties fundamental rights of freedom of expression under the ECHR.  The Supreme Court instead narrowly interpreted the relevance of these other laws, and held that they did not eliminate the possibility that the parties’ activities violated the competition laws.