Clifford Chance

The Court of Appeal quashed the French Competition Authority's decision fining Novartis, Roche and Genentech EUR 444 million for abusing their collective dominant position, providing welcome clarity on the legal test to assess communications by pharmaceutical companies to the public and to health authorities.

The three companies had been found to have engaged in a disparaging campaign against Avastin, a drug used 'off-label' for the treatment of age-related macular degeneration, and marketed by Roche, to the benefit of Lucentis, a drug indicated for that treatment, marketed by Novartis.

As a preliminary point, the CoA significantly narrowed down the scope for potential infringements noting in particular that products which, although 'substitutable in practice', are not 'legally substitutable' due to the applicable regulatory framework, do not belong to the same product market.

Turning to substance, the CoA takes the opportunity to recall that dominant companies have a right to freedom of speech, and are fully entitled to defending their commercial interests, as long as they compete on the merits.

More specifically, the CoA first clarifies that communications which (i) contribute to a public interest debate, (ii) are sufficiently grounded in fact, and (iii) are made in an objective and neutral tone, do not constitute abusive disparagement under EU competition rules.

The CoA notes in particular that communications concerning differences between an originator product and a generic (which are presumed, by law, to be as safe and efficacious) and communications between a product indicated for a treatment and a product used 'off-label' for that treatment are not assessed in the same manner.

Secondly, the CoA judgement also confirms, if there was a need, that communications to health authorities, as decision-makers, must be assessed as a separate potential abuse. For such communications to be regarded as alarmist or misleading, in the sense that they would lead authorities to adopt an illegitimate decision, the threshold is particularly high, as they are able to gain a good understanding of the issues at stake, and critically assess the scientific studies are arguments put forward.

Although subject to appeal to the Supreme Court, this judgement is undeniably a significant development in the case-law on disparagement under Article 102 TFEU, at a time where it is generating interest, with the European Commission having recently announced two investigations in this field.