Novartis headquarters raided in Swiss competition authority's patent probe

Some guests recently “visited” Novartis’ headquarters in Basel, the company said. But, according to Switzerland’s competition watchdog, it was a raid.

The Swiss Competition Commission (COMCO) said it has opened an investigation into an unnamed pharma company about possible unlawful use of a patent to stymie competition. As part of the probe, the agency conducted an early morning raid of the company’s offices on Tuesday, the agency said Thursday.

Novartis then identified itself as the target in its own statement Thursday.

“The opening of an investigation does not imply any finding of wrongdoing or any financial impact,” the drugmaker said. “Novartis is fully cooperating with the authorities and is confident to clarify the legitimacy of its position.”

The case centers on a drug for skin diseases. COMCO said Novartis allegedly tried to stave off competition through lawsuits based on a patent.

Biopharma companies routinely fight each other in patent infringement lawsuits. But the investigation aims to find out what the COMCO suspects could constitute the use of a “blocking patent,” which involves abuse of a dominant market position, according to the Swiss Cartel Act, the agency said.

Novartis said the investigation is in early stages, and it won’t comment further at this point.

The exact drug under question remains unknown. Among Novartis’ offerings, the one skin drug that might come close to a dominant status is psoriasis treatment Cosentyx. The IL-17A inhibitor is currently Novartis’ top-selling drug, with $2.4 billion sales in the first half of the year after 12% year-over-year growth at constant currencies. But the drug has a direct competitor in Eli Lilly’s Taltz. Novartis’ 2021 annual report and its interim financial report for the first six months of 2022 didn’t list any significant outstanding litigation tied to Cosentyx.

Cosentyx’s patent on psoriasis use is expected to expire in 2032 in the U.S. and in 2031 in EU, according to Novartis’ annual report. The Swiss company did note that the drug’s patent on ankylosing spondylitis, an inflammatory disease that affects bones in the spine, is being challenged at the European Patent Office. It’s also worth noting that Switzerland isn’t a EU member.

Novartis has been targeted in anti-competition probes before. Last year, Novartis’ Sandoz generics unit agreed to pay $185 million to resolve civil claims related to a criminal price-fixing case, which the company had previously settled with a $195 million payment.

Back in 2020, Novartis and its partner Roche were fined $526 million in France over anti-competitive practices the pair allegedly used to push their eye drug Lucentis over the off-label version of Roche's Avastin.