GSK and co fined £45 million over pay-for-delay deals
London | 12 February 2016

The UK Competition and Markets Authority (CMA) has fined GlaxoSmithKline and other pharmaceutical companies £45 million for engaging in anti-competitive pay-for-delay deals.

The CMA found that GlaxoSmithKline, along with other pharmaceutical companies, engaged in pay-for-delay settlements worth more than £50 million between 2001 and 2004, to stall the entry of generic versions of its anti-depressant drug Seroxat (paroxetine) in the UK market.

Seroxat sales exceeded £90 million in 2001, and 4.2 million prescriptions were dispensed for Seroxat in 2000.

A number of generic manufacturers, including Generics Limited and Alpharma Limited, were taking steps to enter the UK market, but GlaxoSmithKline threatened them with patent infringement litigation .

The pay-for-delay agreements “potentially deprived” the National Health Service of the “significant price falls that generally result from generic competition”, claimed the CMA.

When generic entry took place at the end of 2003, average paroxetine prices dropped by more than 70 percent.

According to the CMA, GlaxoSmithKline “induced” the generic manufacturers to “delay their efforts to enter the UK paroxetine market independently of GlaxoSmithKline, infringed the competition law prohibition on abuse of a dominant position”.

A £5 million fine has also been imposed on Merck, the former parent company of Generics UK.

Michael Grenfell, CMA executive director for enforcement, said: “This investigation shows our determination to take enforcement action against illegal anti-competitive practices in sectors big and small.”

“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.”

Author: Tammy Facey

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