GSK Fined for Blocking Copies of Seroxat

15.02.2016 -

Major UK drugs firm GlaxoSmithKline (GSK) has been fined more than £37 million by the Competition and Markets Authority (CMA) for anti-competitive behavior relating to generic forms of its anti-depressant Seroxat.

The CMA said GSK had made payments totaling more than £50 million to companies making generic versions of the drug, also known as paroxetine. The other companies fined include Generics UK and Merck KGaA, which were fined a combined £5.8 million, and Alpharma, Actavis UK and Xellia Pharmaceuticals, which were fined a combined £1.5 million.

Between 2002 and 2004, GSK agreed to make cash payments to its competitors to prevent the generic versions appearing on the market. In addition, the agreements allowed the generic manufacturers to bring small amounts of paroxetine to the market, effectively allowing them to realize some profit without increasing competition.

The CMA’s executive director for enforcement, Michael Grenfell, said the regulator’s decision sent out a strong message that it would tackle illegal behavior designed to limit competition at the expense of customers. “Cracking down on these practices is essential to protect consumers, to encourage legitimate business activity that such practices stifle, and to stimulate innovation and growth,” he said.

But GSK said it disagreed with the ruling and was considering an appeal. It said its actions actually saved the UK’s National Health Service (NHS) money and brought the generic drugs to the market sooner. According to a GSK spokesman, the agreements were made at the time to settle costly, complex and uncertain patent disputes, and they ultimately saved the NHS more than £15 million.

The authority pointed out, however, that after generic paroxetine entered the market properly at the end of 2013, average prices for the drug fell by more than 70% in two years.

The GSK case is the latest in an international clampdown on these pay-for-delay deals which occur when generic drug manufacturers threaten to bring a legal challenge against patents in order to break the market dominance of branded versions.

Israel’s Teva agreed to pay $1.2 billion last year to settle a pay-for-delay case brought by the US Federal Trade Commission. It was also among five companies, including French drug maker Servier, which were fined a combined €428 million by the European Commission in 2014.

The CMA has other drugs firms in its sights. Last August, it reached a provisional view that Pfizer and the UK’s Flynn Pharma has charged excessive prices for an anti-epilepsy drug, phenytoin sodium. A decision is expected later this year.

The regulator also opened a probe against an undisclosed pharmaceutical company last December.