In a judgment delivered on October 5, 2021 (the “Judgment”), the Italian Supreme Court held that the appeals filed by F. Hoffmann-La Roche Ltd. and Roche S.p.A. (“Roche”), as well as Novartis Farma S.p.A. and Novartis AG (“Novartis” and, together with Roche, the “Parties”), against a ruling issued in 2019 by the Council of State, were inadmissible. The ruling of the Council of State upheld the findings of the Regional Administrative Tribunal for Latium (the “TAR Lazio”), which, in turn, had entirely confirmed the 2014 ICA decision fining the Parties approximately €180 million overall for an alleged violation of Article 101 TFEU (the “ICA Decision”), in connection with the commercialization of the Avastin and Lucentis drugs.
The ICA Decision
Avastin and Lucentis are drugs developed by Genentech, a company belonging to the Roche group. Genentech licensed Avastin and Lucentis to Novartis and Roche, respectively.
In 2005, the Italian Medicines Agency (“AIFA”) authorized the marketing of Avastin for the treatment of tumors. Shortly thereafter, in 2007, AIFA authorized Lucentis for the treatment of certain eye diseases. In the timeframe in which Lucentis was waiting to be put on the market, some physicians noticed that Avastin could also be used off-license for the treatment of age-related macular degeneration and other eye diseases, although it was authorized only in oncology. Since Avastin was less expensive than Lucentis, it started to be widely used as an off-label medicine for the treatment of eye diseases, although Genentech and Roche (as market authorization holders) never sought Avastin’s registration for ophthalmologic use.
The ICA Decision declared the Parties liable for putting in place an alleged anticompetitive strategy aimed at artificially differentiating the two drugs, with a view to reducing the use of Avastin in ophthalmology and increasing the sales of Lucentis, thus significantly raising the costs borne by the Italian health service.
In the ICA’s view, this objective was inter alia pursued through the dissemination of information designed to create doubts over the safety of the use of Avastin for the treatment of eye diseases, despite the lack of clear scientific evidence supporting such doubts. Accordingly, the ICA found that the Parties’ conduct amounted to a market-sharing agreement, which constituted a by-object restriction of Article 101 TFEU, and imposed on each of the Parties a fine of approximately €90 million.
The Council of State Judgment
On July 15, 2019, the Council of State fully rejected the Parties’ appeals against the TAR Lazio’s ruling, which had entirely upheld the ICA Decision.
The Council of State judgment made reference to the guidance provided in January 2018 by the CJEU, in the preliminary ruling delivered following a referral by the Council of State.
In its judgment, the Council of State held that:
- insofar as sector regulation did not forbid the off-label use of Avastin, nor its repackaging for such off-label use, the ICA was right in defining the relevant product market as comprising both drugs typically used for the treatment of eye diseases following a specific marketing authorization and drugs used off-label to treat the same diseases;
- the arrangement between the Parties could not be considered ancillary to their licensing agreement (and thus permitted under competition rules) since it was not aimed at restricting the Parties’ commercial autonomy with respect to Lucentis (which was the product covered by the licensing agreement), but rather the conduct of third parties (in particular healthcare professionals) with a view to reducing the prescription of Avastin in ophthalmology, in order to maximize the economic return on the sales of
- the ICA correctly found that the Parties had colluded “to manipulate the public’s risk perception” relating to the off-label use of Avastin, as well as to “artificially” differentiate two medicinal products which were allegedly equivalent (and, as such, substitutable) from the point of view of safety and effectiveness in the treatment of eye diseases.
In 2019, the Parties asked the Council of State to revoke its judgment, on the ground that it was vitiated by errors of fact, and to send again the case to the CJEU for a preliminary ruling. The Council of State referred the matter to the CJEU in March 2021. More specifically, the Council of State asked the CJEU to rule on whether: (i) the July 2019 Council of State judgment was in violation of the previous CJEU preliminary ruling; (ii) the Italian legal system is incompatible with EU law principles to the extent that it does not allow for a judicial remedy against a judgment issued by an Italian last instance court that clearly violates EU law. The CJEU has not issued its preliminary ruling yet.
The judgment of the Supreme Court
In parallel, Roche and Novartis brought an action before the Supreme Court, arguing that the Council of State failed to carry out the factual verification that the CJEU had expressly required it to do in the 2018 preliminary ruling with regard to various facts on which the ICA based its Decision, and namely: (a) the possible unlawfulness of the conditions under which Avastin was repackaged and prescribed; (b) the misleading nature of the information disseminated by the Parties.
In the Parties’ view, in doing so the Council of State declined to fully exercise its jurisdictional power. According to the Parties, this was among the reasons of ‘jurisdiction’ on the basis of which, according to Article 111(8) of the Italian Constitution, appeals in cassation against decisions of the Council of State are permitted.
On October 5, 2021, the Supreme Court fully dismissed the appeals as inadmissible, finding that (i) the Council of State fully carried out the factual verification requested by the CJEU; (ii) the Parties were actually asking the Supreme Court to carry out a novel assessment of the facts. According to the Supreme Court, what the Parties identified as a denial of jurisdiction was, at the most, an error in the assessment of the facts. As such, it did not constitute a ‘reason of jurisdiction’ and therefore could not be challenged by way of an appeal in cassation for reasons of jurisdiction. In particular, the Supreme Court held that:
- based on the established case law, the Supreme Court lacks competence to review decisions of the Council of State in the event of a violation of EU law;
- in its 2019 judgment, the Council of State had not departed from the CJEU’s preliminary ruling. According to the Supreme Court, the Council of State had carried out the factual verifications required by the CJEU, by investigating the possible unlawfulness of the conditions under which Avastin was repackaged and prescribed, as well as the misleading nature of the allegations of the lesser safety of one medicinal product compared to another;
- the appeals aimed at questioning how the factual verifications were carried out by the Council of State, which is an aspect falling outside the Supreme Court’s competence;
- there was no violation of EU law, as the judgment of the Council of State had taken a clear position on the factual verifications required by the CJEU. As a result, the Court did not consider it necessary to refer the case to the Italian Constitutional Court for a constitutionality review, nor to make a preliminary reference to the CJEU, as requested by the Parties;
- finally, in case a last instance court violates the principles established by a preliminary ruling of the CJEU, alternative remedies are available for individuals under EU law, such as actions for damages against national
 Supreme Court, Judgment of October, 5, 2021, No 26920.
 Council of State, Judgment of July 15, 2019, No. 4990.
 TAR Lazio, Judgment of December 2, 2014, No. 12168.
 ICA, Decision of February 27, 2014, No. 24823, Case I760, Roche-Novartis/Farmaci Avastin e Lucentis.
 On this Decision, see Cleary Gottlieb, Italian Competition Law Newsletter, July 2019, available at: https://www.clearygottlieb.com/-/media/files/italian-comp- reports/italiancompetitionlawnewsletterjuly2019pd-pdf.pdf
 CJEU, Judgment of January 23, 2018, C-179/16, F. Hoffmann-La Roche and Others, ECLI:EU:C:2018:25.
 Under Italian law, revocation is an extraordinary judicial remedy against judgments of last instance courts that involves convincing a different composition of the same court that the previous judgment was based on a blatant error of fact and, as such, has rather limited chances of success.
 Council of State, Order of March 18, 2021, No. 2327.
 CJEU, F. Hoffmann-La Roche and Others, C-261/21, pending.
 Under the Italian legal system, and specifically pursuant to Article 111(8) of the Italian Constitution, “Appeals to the Court of Cassation against decisions of the Council of State and the Court of Accounts are permitted only for reasons of jurisdiction” (i.e., regarding the division of competences between ordinary and administrative judges). Official English translation available at https://www.senato.it/documenti/repository/istituzione/costituzione_inglese.pdf, accessed December 12, 2021. Accordingly, all conflicts between ordinary and administrative tribunals (conflicts on ‘jurisdiction’) are solved by the Supreme Court. As a result, the mechanism of judicial review is dual, but not symmetrical. One of the two highest courts, the Supreme Court, has, to some extent, primacy over the Council of State, as it has the power to decide over issues of ‘jurisdiction’.
 Supreme Court, Judgment of October, 5, 2021, No 26920.
 In particular pursuant to Article 111(8) of the Italian Constitution, Article 360(1) and Article 362(1) of the Italian Code of Civil Procedure, and Article 110 of the Italian Code of Administrative Procedure.