The Italian Administrative Supreme Court Opens New Perspectives for Therapeutic Equivalents

By rejecting an appeal from Novartis, the Italian Administrative Supreme Court, with its decision n. 1306 of April 1st, 2016, focused on the notion of therapeutic equivalence under Italian law. Having underlined the difference with the concept of bioequivalence and having broadened its possible future application, the decision is likely to push forward the trend of public health care institutions to increase competition between pharmaceutical companies in the context of public tender offers, possibly for the benefit of taxpayers and patients.

The controversy arose from an opinion issued by the Italian Medicines Agency (“AIFA”) which, in a tender procedure held by Tuscany region, evaluated the drug Lucentis by Novartis (active ingredient ranibizumab) as a therapeutic equivalent to Eylea by Bayer (active ingredient aflibercept). This allowed the regional public administration to have the said drugs compete against each other in the same tender offer.

Debates as to whether Lucentis and Eylea are equivalent in terms of functions are not indeed new in the pharmaceutical scene and have caused many headaches to Novartis, let alone the critical issues raised in relation to Lucentis by the Italian Antitrust Authority.  Not a surprise, then, that Novartis tried to defend its product, alleging the illegitimacy and erroneousness of AIFA’s evaluation, which stated that the cheaper option by Bayer (Euro 780) is equally safe and effective in the treatment of macular degeneration as it is its more expansive (Euro 902) drug.

Novartis, nevertheless, failed in its claims. The Italian Administrative Supreme Court confirmed the validity and correctness of AIFA’s evaluation, together with the decision of the lower court, affirming, inter alia, that:

  • therapeutic equivalence is different from bioequivalence because the latter implies the identity of the active ingredient whether the former does not (indeed, FDA’s indications on the issue are rather similar);
  • the authority of AIFA in determining therapeutic equivalence is legitimate under Italian law;
  • evaluations regarding therapeutic equivalence cannot be based exclusively on the products’ leaflet: they are instead well motivated if they verify that (i) the drugs belong to the same Anatomical Therapeutic Chemical class; (ii) the drugs are subject to a similar route of administration and (iii) the drugs release the active ingredient in comparable ways.

Therapeutic equivalence, as it has recently emerged from Italian legislation and case law (in particular, from the decision discussed herein), is seen as a threat by pharmaceutical companies, unnerved by the increased competition effects.

Indeed, the debate has been escalated to a more general level by the Italian association of pharmaceutical companies, which challenged in many ways AIFA’s guidelines on therapeutic equivalence. As a consequence, a few days ago AIFA precautionary suspended for ninety days the said guidelines.

It looks like the match has just begun. Nevertheless, pharmaceutical companies should consider carefully on which side they should play. In fact, the expansion of the application of therapeutic equivalence, as a general trend, does not seem to be stoppable in a constant spending review context. Perhaps pharmaceutical companies should positively contribute to shape, rather than to stop, therapeutic equivalence and exploit its potential for the business in terms of new opportunities to access tender offer procedures.

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