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French Competition Regulator Probes Roche, Novartis

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Novartis Headquarters
A logo sits above windows at Novartis AG's headquarters in Basel, Switzerland. Photographer: Gianluca Colla/Bloomberg

March 11 (Bloomberg) -- France’s competition authority is investigating Novartis AG and Roche Holding AG for possible collusion to prevent the use of Roche’s Avastin cancer drug as a treatment for an eye disease, the health-care ministry said.

French Health Minister Marisol Touraine wrote a letter to Finance Minister Pierre Moscovici at the end of 2012 urging him to ask the competition authority to investigate the matter, Henri Pitron, an official at the Health Ministry, said in a phone interview. The Finance Ministry proceeded with the request and the regulator’s investigation is “ongoing,” Pitron said.

Roche and Novartis are under scrutiny after Italy’s antitrust regulator said last week it fined the two Basel, Switzerland-based companies 182.5 million euros ($253 million) for alleged collusion on the medicine. Novartis must pay 92 million euros and Roche 90.5 million euros, the agency said.

“The subject isn’t closed,” Eric Le Berrigaud, an analyst at Bryan Garnier & Co. in Paris, said in a telephone interview. Scrutiny from other countries will “in all likelihood” continue, he said.

Roche and Novartis blocked distribution of Avastin in favor of a more expensive drug, Lucentis, that the two companies market jointly for an eye malady known as wet age-related macular degeneration, the Italian regulator said last week.

Italian Appeal

Avastin is only approved for cancer, but it belongs to the same family of medicines as Lucentis, one called anti-VEGF that prevents blood-vessel growth. For that reason, and because Lucentis costs more, some doctors in the U.S. and Europe use Avastin to treat the eye condition even if the medicine isn’t approved for that use, a practice known as “off label.”

Yannick Le Dorze, a spokesman for France’s Autorite de la Concurrence, declined to comment on the investigation. Anja von Treskow, a spokeswoman for Novartis in Basel, and Claudia Schmitt, a spokeswoman for Roche, also declined to comment. The two Swiss drugmakers said on March 5 they have no agreement to restrict competition and they plan to appeal the Italian verdict.

European authorities are monitoring drug prices more closely as governments face ballooning health-care costs because of an aging population and as the number of patients suffering from chronic diseases such as diabetes rises.

Touraine in 2012 had already called for an extension of Avastin’s authorization as a treatment for eye disease, and she had demanded a re-examination of the price of Lucentis, according to a July 2012 statement on the ministry’s website.

Authorities are also resorting to other methods to lower costs. Touraine has sent a draft decree to the Conseil d’Etat, France’s highest administrative court, to allow the temporary use of unapproved drugs “for economic reasons,” Pitron, the ministry official, said. Italian Health Minister Beatrice Lorenzin was cited as telling Italian newspaper La Repubblica in an interview published this month that she plans to draft a bill to allow off-label use of medicines “for economic reasons.”

To contact the reporter on this story: Albertina Torsoli in Geneva at atorsoli@bloomberg.net

To contact the editors responsible for this story: Phil Serafino at pserafino@bloomberg.net Robert Valpuesta, David Risser

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