An arrangement between Roche (RHHBY) and Novartis (NVS) to channel demand to an expensive drug for treating a serious vision problem breached European Union competition rules, the E.U. Court of Justice ruled on Tuesday. And while this is not the final step in the litigation, the decision is likely to provide encouragement to European governments struggling to contain health care costs.
Here’s the back story: The ruling upheld a 2014 decision by Italy’s antitrust authority that the drug makers colluded to boost sales of Lucentis, a pricey treatment for age-related macular degeneration they jointly market, and discredited the cheaper Avastin drug by emphasizing potential side effects. The regulator fined each company about $110 million, which the drug makers subsequently appealed.