Six years ago, the French Competition Authority raided the local offices of Roche and Novartis in search of evidence of missteps in the way the companies were marketing Lucentis for age-related macular degeneration (AMD).
Now, the agency has come back with its verdict—and it couldn’t come at a worse time for Novartis, which is facing challenges marketing its Lucentis rival, Beovu, in Europe.
The Competition Authority levied a fine of €385 million ($455 million) against Novartis and €60 million ($71 million) against Roche, according to several press reports in Europe. Lucentis was developed by Roche’s Genentech division and is marketed in Europe by Novartis.
The agency said the penalties were in response to allegedly anti-competitive practices by the companies in pushing Lucentis over Roche’s similar—and much less expensive—cancer drug Avastin, which can be used off-label to treat AMD.
Novartis is “very disappointed” and “strongly refutes” the allegations of anti-competitive practices, it said in a statement.
“Novartis believes that this decision relies on a gross misinterpretation of the facts and a distortion of previous case law that is not intended to cover the situation in this case,” it added. The company is planning an appeal.
Roche, for its part, said in a statement that it believes it was in compliance with local health regulations and “will assess our next steps.”
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Because Lucentis and Avastin work similarly, some eye doctors have been repackaging the latter drug into syringes that can be used to inject it into the eye. The cost difference can be significant: The French Competition Authority estimated that Lucentis costs €1,161 per injection, while Avastin is €40 or less.
Novartis and Roche had already gotten into a tussle over the two drugs with Italian authorities, who levied fines totaling €180 million in 2014 over allegations that the companies improperly guided patients to Lucentis over Avastin. Roche and Novartis fought the punishment, but late that year, an Italian court upheld the charges.
The EU stepped into the investigations, and in 2018, it ruled that if the companies disseminated misleading information about Avastin to shift favor to Lucentis, it would be a violation of EU regulations.
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Novartis, meanwhile, has been struggling to persuade eye doctors to embrace Beovu, which was approved in the U.S. last October and in the EU in February. But that same month, the American Society of Retina Specialists flagged 14 cases of retinal vasculitis reported among Beovu patients, most of which were serious enough to put them at risk of vision loss.
It was enough to prompt eye doctors surveyed by Piper Sandler to drastically reduce their estimates for Beovu’s market share potential; after initially predicting it could grab 17% share by August, they revised that prediction downward to just 8.4%. The docs predicted “anger and mistrust of [Novartis], indicating an uphill battle," Piper Sandler analysts wrote in a note to clients.
Sales of Beovu fell from $68 million in the first quarter of this year to $34 million in the second. COVID-19 shutdowns didn’t make selling eye drugs any easier: Novartis reported that in the second quarter, Lucentis sales dropped 25% year over year to $401 million.