Novartis and Roche were fined a combined €182.5 million (approximately $250.3 million) by the Italian Competition Authority, which accused the pharma giants of ripping off Italy’s state-run healthcare system by colluding to steer doctors toward prescribing the companies’ costly eye treatment Lucentis rather than a cheaper alternative, Roche’s Avastin.

The authority said the companies colluded by creating “an artificial distinction between the two products” since 2011 for economic reasons: Roche collects royalties from sales of Lucentis, developed by its Genentech subsidiary, while Novartis benefits directly from Lucentis’ sales and holds a more-than-30% stake in Roche. Novartis’ new chairman, Joerg Reinhardt, on Sunday denied months of speculation that the companies will merge, in an interview with Swiss newspaper SonntagsZeitung.

This illicit collusion might have hindered access to treatment for many patients and caused the National Health Service to sustain additional expenses estimated at €45 million ($61.7 million) in 2012, while increased future costs might possibly exceed €600 million ($823 million) per year,” the authority said in a statement.

The authority based its expense argument on the price difference between the drugs. An injection of Lucentis in Italy costs €900 ($1,235)—down from an earlier price of €1,700 (about $2,334), but well above the €81 ($111) price for an off-label injection of Avastin.

The authority fined Novartis €92 million ($126.2 million) and Roche, €90.5 million ($124.1 million). Novartis and Roche criticized the fines and said they will appeal the authority’s decision.

Roche told several news outlets the Italian charges were unfounded.

Novartis issued a statement, furnished this morning to GEN, contending that the authority “undermines the European regulatory framework designed to protect patient safety” with its decision, which according to the company “openly encourages and promotes the widespread unlicensed intravitreal use of Avastin contrary to the requirements of European and Italian regulatory law.”

Novartis noted that Lucentis was designed, developed and manufactured for intravitreal intra-ocular use, and was the only anti-VEGF authorized in five ocular indications. By contrast, Avastin is not licensed for any ocular condition, for administration in the eye and compounding into smaller doses.

Novartis in its statement defended its communicating of published safety data to patients, healthcare professionals, and health authorities associated with the use of Avastin for eye disorders, contrasting that data with Lucentis’ safety profile with more than 2.4 million patient-treatment years of exposure globally.

“We strongly believe that patients have the right to be informed about important safety risks associated with licensed as well as unlicensed products and Novartis’ position is to fully respect competition law,” the company stated.

But the advocacy group European Consumer Organisation wants collusion between the companies investigated by the full European Union, saying in a tweet: “High time for EU action.”

The authority noted that while Avastin is approved for several cancer indications, it has been used off-label since the mid-2000s to also treat “common eyesight conditions” since it contains an active substance similar to Avastin’s. Lucentis has been submitted for regulatory approval by Genentech in the U.S., and by Novartis elsewhere in the world, specifically for eyesight conditions previously treated through Avastin, the Italian agency added.

Lucentis contains an active substance similar to Avastin’s, and that it was submitted for regulatory approval by Genentech in the US and Novartis everywhere else specifically for the eyesight conditions previously treated through Avastin.

Last year, Lucentis generated CHF 1.689 billion ($1.9 billion) in U.S. sales for Roche, plus another $2.38 billion in rest-of-world sales for Novartis. Avastin racked up CHF 6.254 billion (just over $7 billion) in 2013 global sales for Roche.

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