UK Regulator Fines GSK Over Generic Drug Delay - Update

By Ian Walker 

LONDON--U.K. pharmaceutical company GlaxoSmithKline PLC has been fined GBP37.6 million ($53.7 million) by the U.K.'s Competition and Markets Authority for trying to delay the potential entry of competitors into the U.K. generic-drugs market for antidepressant drug paroxetine.

Between 2001 and 2004, GlaxoSmithKline agreed to make payments and provide other benefits, together valued at more than GBP50 million, to suppliers of generic versions of paroxetine, the CMA said in a news release.

"The CMA has found that these payments and other value transfers were aimed at delaying the potential entry of generic competitors into the U.K. market for paroxetine," the U.K. regulator said.

GlaxoSmithKline said it disagreed with the ruling and was considering grounds for appeal.

In 2001, a number of pharmaceutical companies, including Generics (U.K.) Ltd. and Alpharma Ltd., were trying to enter the U.K. market for paroxetine with a generic version. Glaxo challenged these pharmaceutical companies, alleging that their generic products would infringe its patents, and started litigation proceedings against them.

The CMA said that 4.2 million prescriptions were issued for GSK's own branded version of paroxetine--Seroxat--in 2000 in the U.K. and that Seroxat sales exceeded GBP90 million in 2001. At the time, GSK held certain patents in relation to paroxetine.

Before that litigation went to trial, Generics and Alpharma entered into agreements with Glaxo, which included terms prohibiting their independent entry into the U.K. paroxetine market, the CMA said.

Glaxo's agreements with Generics and Alpharma infringed the competition law prohibition on anticompetitive agreements, the CMA said, and "potentially deprived the National Health Service of the significant price falls that generally result from generic competition."

The CMA said that when generic paroxetine eventually entered the market at the end of 2003, average prices for the drug dropped by over 70% in 2 years.

Glaxo disputed the CMA's ruling.

"GSK and the generics companies entered into these agreements at the time in order to settle costly, complex and uncertain patent disputes. The agreements allowed the generics companies to enter the market early with a paroxetine product and ultimately enabled a saving of over GBP15 million to the NHS," a Glaxo spokesman said in an emailed statement.

The CMA on Friday also imposed fines on Generics and Alpharma of GBP5.84 million and GBP1.54 million, respectively.

Write to Ian Walker at [e-mail]

(END) Dow Jones Newswires

February 12, 2016 04:27 ET (09:27 GMT)

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