(ANSA) - Rome, March 14 - The cabinet on Friday moved to simplify charges for drug offenders, approving a decree that reintroduces degrees of penalties according to which type of narcotic is found in someone's possession. The measure follows a supreme Court of Cassation decision last month that threw out as "illegitimate" a 2005 law that equated the possession of soft drugs to heavy drugs, and was blamed as a contributing factor to severe overcrowding in Italian prisons. Detractors of that law, which was sponsored at the time by then-right-wing MP Gianfranco Fini and centrist MP Carlo Giovanardi, argued it violated a 1993 popular referendum in which a majority of Italians voted to decriminalize drug possession for personal consumption.

The so-called Fini-Giovanardi law, which had been passed by ex-premier Silvio Berlusconi's centre-right government, had been challenged several times, namely for violating the European Union legal principle that the punishment must be proportional to the crime.

The law introduced heavy sanctions, including jail time for small-time dealers. Now the law distinguishes between hard and soft drugs, with lighter sentences for substances such as marijuana, and harsher ones for class A hard drugs, such as heroin and cocaine.

On Friday, Health Minister Beatrice Lorenzin said "the cabinet voted to bring back classifications because a void had been left following the Cassation's ruling". The new classifications are also expected to help to ease prison overcrowding, which has become a serious problem as Italy has the most cramped prisons in the EU, with about 147 inmates for every 100 beds, human rights organisations have said.

That's well above a European average of 105.

The European Court of Human Rights in May ordered Italy to dramatically improve its prison system, stop overcrowding and stop violating prisoners' rights.

The decree was not limited to illicit drugs. It also includes a measure to prevent the formation of pharmaceutical cartels following a suspected fraud involving Swiss pharmaceutical companies Roche and Novartis. Rome prosecutors last week announced that Roche and Novartis are being probed for alleged market manipulation and fraud against Italy's national health service in connection with a suspected collusion to hamper use of a cheap eye drug in favour of a more expensive one.

The decree approved on Friday "provides for legislation to sponsor the use of off-label medicines which are less expensive for the national healthcare system but equally effective from a therapeutic standpoint," said Lorenzin. Meanwhile prosecutors announced Friday that the board and management of Roche and Novartis are under investigation in Rome for the alleged cartel promoting Novartis's Lucentis over Roche's Avastin.

The Antitrust authority said last week it had fined the companies a record 180 million euros.

It said the companies' actions had cost the Italian national health service over 45 million euros in 2012 alone and that future costs could potentially reach 600 million euros a year. Novartis and Roche have both denied the allegations and said they would appeal to the administrative courts.