After ICAP, new developments from the Court of Justice to the notion of a ‘by object’ restriction

PartiesJurisdictionFormationJudge RapporteurAdvocate GeneralSubject-matter
Non-contractual liabilityHoffmann-La Roche e.a. v Autorità Garante della Concorrenza e del MercatoCourt of JusticeGrand ChamberC.G. FernlundH. Saugmandsgaard ØeAntitrust – Concerted practice
KeywordsReference for a preliminary ruling — Competition — Article 101 TFEU — Agreements, decisions and concerted practices — Medicinal products — Directive 2001/83/EC — Regulation (EC) No 726/2004 — Allegations of risks associated with the use of a medicinal product for a treatment not covered by its marketing authorisation (off-label) — Definition of relevant market — Ancillary restriction — Restriction of competition by object — Exemption
Significant pointsThis case concerned the marketing of two medicinal products developed by Genetech, a Roche subsidiary, one for the treatment of cancer (Avastin) and the other for the treatment of ophthalmological conditions (Lucentis). Avastin was marketed by Roche itself through a licensing agreement with its subsidiary, while Novartis commercialised Lucentis through another licensing agreement with Genentech.

Following an investigation into these arrangements, the Italian Competition Authority imposed a fine on both pharmaceutical companies on the grounds of anticompetitive behavior pursuant to Article 101 TFEU. The authority found that they had concluded an agreement which was designed to disseminate misleading information relating to the adverse reactions resulting from the off-label use of Avastin in the field of ophthalmology.

The Italian Supreme Court, before which the case was brought on appeal, referred five questions to the Court of Justice for a preliminary ruling.

Firstly, the Court addressed a question related to the definition of the relevant market when a medicine is used outside of its marketing authorisation (MA). The Court considered that the fact that pharmaceutical products are manufactured or sold illegally prevents them, in principle, from being regarded as substitutable or interchangeable products. However, the Court noted that the EU rules on pharmaceutical products do not prohibit as such the off-label prescription of a medicine, provided that it complies with the conditions laid down in those rules. Given that compliance verification is not the responsibility of competition authorities but of pharmaceutical regulatory authorities (or national courts), the Court judged that, in order to assess whether a medicine whose MA does not cover the treatment of certain diseases falls within the same relevant market as a medicine with a MA, a competition authority must take into account the outcome of the compliance examination that may be carried out by the competent authorities (paras 48 to 61).

Secondly, the Court discussed whether the restriction described above may fall outside the scope of Article 101 TFEU as an ancillary restraint to a licensing agreement. This argument was promptly dismissed by the Court on two grounds: first, the disputed conduct was not designed to restrict the commercial autonomy of the parties to the licensing agreement but rather the conduct of third parties (in particular healthcare professionals); second, the restraint was agreed upon several years after the licensing agreement was concluded and so was not necessary for the latter (paras 68 to 75).

Finally, the Court addressed the main issue at stake, namely whether such an arrangement constituted a restriction of competition ‘by object’. The arrangement between the two undertakings marketing the two competing products concerned the dissemination of information, in a context of scientific uncertainty on the matter, relating to adverse reactions resulting from the use of one of those medicinal products for illnesses not covered by its MA, with a view to reducing the competitive pressure resulting from that use on another medicinal product covered by an MA covering those illnesses. On this point, the Court first noted that the fact that two undertakings colluded with each other with a view to disseminating information specifically relating to the product marketed by only one of them might constitute evidence that the dissemination of information pursues objectives unrelated to pharmacovigilance, given that pharmacovigilance obligations apply only to the company which markets the product. Then the Court observed that the dissemination of misleading information (i) encouraged doctors to refrain from prescribing the product, thus resulting in a reduction in demand, and (ii) constituted an infringement of the EU pharmaceutical regulations. Given these circumstances, the Court stated that the restriction at issue constitutes a restriction of competition ‘by object’ to the extent that the referring court confirms the misleading nature of the information communicated to the pharmaceutical regulatory authorities and the general public (paras 91 to 95).
NoteworthyA couple of weeks after the Icap judgment of the General Court (T-180/15), the Court of Justice brings further developments to the notion of a ‘by object’ restriction of competition. The Court confirms its use of this notion, which exempts competition authorities from the burden of proving the anticompetitive effect of a particular practice. The notion proves to be quite open and not limited to an exhaustive list. The Court indeed recalls that the ‘by object’ category is not limited solely to prima facie restrictions of competition. In this case, the infringement is an atypical consisting in the artificial creation of two different markets (even though it that has some analogies with a market-sharing cartel). The notion of ‘by object restriction’ also allows for consideration of the economic and legal context of the practice. In addition, in the case at hand, the Court relies on an in-depth analysis of the regulatory context of the agreement. On this basis, the Court uses the body of evidence method. On the one hand, it takes into account the incongruous nature of the agreement. On the other hand, the Court takes into consideration the "expected" result of the collusion. While it is well established case-law that anti-competitive intent is not a necessary element in determining whether an agreement has the object of restricting competition, the Court seems to recall here that this intention can nevertheless be taken into account.