On February 16, 2023, the Paris Court of Appeals overturned the French Competition Authority (the “FCA”) decision which had fined Novartis, Roche and its subsidiary Genentech €444 million in 2020, ruling that, contrary to FCA’s findings, the pharmaceutical companies had not abused their collective dominance on the market for the treatment of age-related macular degeneration (“AMD”) by discouraging “off-label” prescriptions (i.e. prescriptions for use outside of the market authorization of a medication).
On September 9, 2020, FCA fined Novartis, Roche and Genentech for abuse of collective dominance position as it considered that the three pharmaceutical companies constituted a single entity because of Novartis’ shareholding in Roche, Roche’s shareholding in Genentech and the licensing agreements between (i) Genentech and Roche for the distribution of Avastin ex-US and (ii) Genentech and Novartis for the distribution of Lucentis ex-US.
The FCA first found that Novartis unduly disparaged Roche’s Avastin medication – a cancer treatment drug also administered off-label by a number of doctors to treat AMD – in order to favor the use of its own medication, Lucentis, which was about 30 times more expensive than Avastin.  Second, the FCA held that the three pharmaceutical companies implemented blocking tactics, including spreading false information about the safety risks of prescribing Avastin off-label and, regarding Roche, failing to seek market authorization for the use of Avastin to treat AMD in order to prevent the entry of this cheaper treatment into the French market for the treatment of AMD.
The three pharmaceutical companies appealed the FCA decision before the Paris Court of Appeals. On February 16, 2023, the Court of Appeals upheld the companies arguments, finding that they had not infringed competition law and thereby quashed the FCA decision in its entirety.
Product scope and timeframe of the alleged practices
Before analyzing the merits of the case, the Court first clarified that while Novartis’ Lucentis is used both in hospitals and pharmacies, Roche’s Avastin can only be found in hospitals. The Court therefore limited the relevant market scope to AMD hospital prescriptions.
Second, following the Mediator healthcare scandal and the entry into force of a new legislation in 2011 (the so-called “Bertrand law”), the use of off-label drugs was heavily restricted in France. In particular, off-label treatments could only be prescribed if there were no authorized alternatives available for a given pathology. Consequently, as of December 2011, Avastin could no longer be used for the treatment of AMD. Conversely, Novartis’ Lucentis had all the necessary authorizations to be used as an AMD treatment. The Court thus found that Avastin (Roche) and Lucentis (Novartis) could not be regarded as competing products on the relevant market (i.e. the French market for the treatment of AMD through hospital prescriptions) as of December 2011.
Lack of disparagement and anticompetitive effects
On the merits, the Court of Appeals found that Roche and Novartis’ communications with healthcare professionals and agencies regarding the benefits of their respective drugs to treat AMD did not amount to anticompetitive disparaging as they were based on accurate knowledge at the time of the alleged practices. In light of the objective differences between Avastin and Lucentis, the respective safety and efficacy of both drugs for AMD treatment were the topic of national and foreign scientific debate at the time, and the risks associated with off-label use of Avastin were unknown. The Court found that the drugmakers had thus legitimately cautioned against the prescription of any off-label drugs, including Avastin, due to lack of scientific studies and proven results.
Regarding Roche, its statements regarding Avastin were considered neither alarmist nor misleading by the Court of Appeals as there was still a great deal of scientific uncertainty and worrying reports regarding the use of off-label Avastin for AMD treatment at the time. Also, as the drugs could not be substituted for one another under the Bertrand Law, the Court considered irrelevant whether Roche had caused delays to further studies or additional authorizations for Avastin, as these factors would not have resulted in any anticompetitive effects.
Regarding Novartis, the Court considered that by highlighting probable – as opposed to definite – links between Avastin and negative effects on health it had merely exercised its freedom of speech to contribute to thelegitimate debate on the substitutability of Avastin for Lucentis. Novartis. This was considered sufficiently moderate in tone and neither misleading nor wrongful by the Court of Appeals.
Hence, the FCA failed to prove, to the requisite standard, that the pharmaceutical companies disparaged the use of Lucentis, and the Court of Appeals annulled the €444 million fine and ordered the FCA to publish an acknowledgment of its ruling on its website, clarifying, in particular, that the three pharmaceutical companies did not commit any anticompetitive infringement.
An appeal of the FCA is currently pending before the French Supreme Court (Cour de cassation).
The FCA decision raised a number of critical questions regarding the definition of a collective dominant position and the nature of the abuse. In particular, the standard of proof applied by the FCA to establish the abuse was low, as it relied almost entirely on one party’s (Novartis) disparagement tactics against Avastin to demonstrate a collective scheme of practices. Although, as one may expect, the Court of Appeals’ ruling falls short of providing any further guidance on the definition of collective abuse, it makes clear that the FCA shall take account of the multi-factorial environment companies operate in and therefore cannot substitute its competition assessment for that of other – in the present case, health – authorities.
 Paris Court of Appeals ruling of February 16, 2023 (No. 20/14632).
 FCA Decision 20-D-11 of September 9, 2020 regarding practices implemented in the treatment of AMD.
 For further details, see the French Competition Law Newsletter, October 2020 edition, available at: https://www.clearygottlieb.com/-/media/files/french-competition-reports/french-competition-newsletter-october-2020.pdf.
 Law No.2011-2012 of December 29, 2011 aimed at reinforcing the safety of medicines and health products.