Italy fines Big Pharma

Source: La Repubblica

10 March 2014

Big Pharma has cost Italian health authorities hundreds of millions of euros. More importantly, it may have cost hundreds of thousands of Italians their sight.

On Wednesday Italy’s antitrust authority fined Swiss pharmaceutical giants Novartis AG and Roche Holding AG EURO 92 million and EURO 90.5 million respectively for colluding to prevent the use of a cancer drug as a treatment for a common eye disease. Untreated, wet age-related macular degeneration leads to rapid, irreversible loss of vision. It affects one in three of the over 60s and yet the Italian Society of Ophthalmology estimates that in Italy alone around 100,000 patients have not been given access to the Novartis produced drug Lucentis because of its high cost.

The two companies are accused of excluding Roche’s Avastin from the market and instead channeling demand towards Lucentis. The drugs are identical, but Avastin costs between EURO 15 and EURO 80 per dose and Lucentis costs EURO 900. The two companies agreed to carve up the market between them. Since 2011 they created an artificial distinction between the two products, registering Avastin only for the treatment of cancer and discouraging patients from using it by presenting it as “more dangerous” than Lucentis. The two multinationals also did everything they could to discredit independent research that showed that the two drugs were identical, according to the Italian authority.

Roche, which controls Genentech, the company that first developed Avastin, collected massive royalties from Novartis for the commercialization of Lucentis, a deal that is estimated to have cost Italy’s health system more than EURO 45 million in 2012 alone, with possible future costs of more than EURO 600 million a year, according to the regulator. It is estimated that replacing Avastin with Lucentis will cost the Italian health service EURO 678.6 million in 2014, as opposed to EURO 63.5 if Avastin is adopted. Clearly it is a problem that does not affect only Italy. France has exclusively adopted Lucentis, at a cost to its health service of EURO 700 million.

In his blog for Repubblica online, health correspondent Michele Bocci argues that the Italian Pharmaceutical Agency (AIFA) should intervene with an ad hoc provision to stop the waste of public funds. “The problem is that the law holds that a pharmaceutical can be used for purposes other than those indicated (as would be the case for Avastin) only if there is no other product indicated for that purpose (here Lucentis).” The law is designed to stop drugs being abused, but is here being manipulated solely for profit.

We all know the arguments about pharmaceutical companies needing to make big profits to justify their spending on R&D. But as Dr. Marcia Angell, former Editor in Chief of the New England Journal of Medicine has pointed out:

“The combined profits for the ten drug companies in the Fortune 500 ($35.9 billion) were more than the profits for all the other 490 businesses put together ($33.7 billion) [in 2002].”

The soaring cost of health care is one of the most crucial problems facing governments in developed countries. With rising life expectancy and low birth rates much of this is inevitable. But authorities like Italy’s AIFA need to be vigilant to stop greedy pharmaceutical companies like Roche and Novartis making the situation even worse.

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