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In a setback for the pharmaceutical industry, a European Union court ruled that government health systems can cover the cost of a drug that has been repackaged for unapproved uses, a decision that appears to reflect concerns about the rising prices for medicines.

At issue is a long-running drama over a prescription drug that is used to treat age-related macular degeneration and efforts by two large drug makers to maintain market share. In this instance, the European Court of Justice sided with Italian authorities, who sought to reimburse the cost of the Avastin cancer drug to treat the vision problem, a common disease among the elderly that can lead to blindness.

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