Last week, France made its move to knock the Novartis eye drug Lucentis out of drug coverage and move its cheaper cousin Avastin into its place. Now, Novartis and its Lucentis partner Roche are fighting back.
French lawmakers sanctioned reimbursement for off-label use of prescription drugs by passing an amendment to the country's social security budget. The new law specifically names Roche's ($RHHBY) cancer drug Avastin as a substitute for its more expensive counterpart, Lucentis, to treat age-related macular degeneration. France's move came after Italy's government agreed to pay for Avastin in treating the eye disease.
Cue the protests from Roche, which makes Avastin and Lucentis, and Novartis ($NVS), which markets Lucentis outside the U.S. Both drugs have the same mechanism of action--they choke off harmful blood vessels. But the companies say that by paying for the off-label use of Avastin in macular degeneration, European governments are endangering patients and may be violating EU laws, according to The Wall Street Journal.
For France and Italy, it's a matter of economics. Gerard Bapt, the French socialist legislator who proposed the off-label amendment, estimated that Avastin is 30 times less expensive than Lucentis in his country, and that passing the measure would save France at least €200 million ($273 million) a year. The prices of the two drugs vary by country, but on average, one injection of Avastin sells for €40 ($53.76) in Europe, while Lucentis costs about €900 ($1,209.47) per injection, according to the WSJ.
Not everyone in Europe supports legislation to promote off-label drug use, however. In May, the director of Europe's top pharma trade group, Richard Bergstrom, wrote a letter to the European Commission opposing the promotion of off-label drug use by health care organizations, according to the WSJ. As leader of the European Federation of Pharmaceutical Industries and Associations (EFPIA), Bergstrom is in the process of scheduling a meeting with Paola Testori Coggi, director general for health and consumers for the Commission, to discuss the matter further.
Roche said it supports EFPIA's position that off-label prescribing decisions should be based on medical need rather than economic pressures, according to the WSJ. Novartis told the WSJ that it's exploring its legal options for challenging the off-label decisions in France and Italy. Lucentis brought in $2.4 billion for Novartis last year, in markets outside the U.S.
Still, the two Swiss pharma giants could be facing an uphill battle in Europe, where their reputations have been tarnished by allegations that they colluded to protect sales of Lucentis. Antitrust watchdogs in Italy are seeking €1.2 billion ($1.6 billion) in damages from Roche and Novartis, while France and the EU have launched separate investigations.
- here's the WSJ story (sub. req.)
Special Report: Top 10 pharma companies by 2013 revenue - Novartis - Roche