London – GlaxoSmithKline plc has been fined £37.6 million ($54.4 million) by the U.K.’s Competition and Markets Authority (CMA) for stalling the potential market entry of generic competitors to its Seroxat anti-depressant drug, also know as paroxetine.
Several other pharmaceutical companies also were fined for anti-competitive conduct and agreements in relation to the supply of paroxetine.
The CMA’s decision relates to conduct and agreements between 2001 and 2004 in which GlaxoSmithKline plc (GSK) agreed to make payments and other value transfers totaling more than £50 million ($72.3 million) to suppliers of generic versions of the drug. The CMA found that the payments were aimed at delaying the potential entry of generic competitors into the UK market.
In 2001, several pharmaceutical companies—including Generics (UK) Limited and Alpharma Limited—were taking steps to enter the UK market for paroxetine with a generic version, according to CMA.
GSK challenged the pharmaceutical companies, alleging that their generic products would infringe its patents, and commenced litigation proceedings against Generics and Alpharma. Before that litigation went to trial, the pharmaceutical companies entered into agreements with GSK prohibiting their independent entry into the U.K. paroxetine market.
The U.K. authority found that the agreements with the two companies and with another company, identified as Norton Healthcare Limited, infringed the competition law prohibition on anti-competitive agreements and that GSK’s conduct in making such payments infringed the prohibition on abuse of a dominant position.
“Today’s decision sends out a strong message that we will tackle illegal behavior that is designed to stifle competition at the expense of customers, in this case, the (National Health Service) and, ultimately, taxpayers,” Michael Grenfell, the authority’s executive director for enforcement, said. “This investigation shows our determination to take enforcement action against illegal anti-competitive practices in sectors big and small.”
In all, the authorities leveled £45 million ($65.1 million) in fines connected to the matter.
GSK said it disagreed with the ruling and that the agreements were made to “settle costly, complex and uncertain patent disputes.” The company also said it is “considering its grounds for appeal.” GSK argued that the agreements allowed the companies to enter the marketplace early and ultimately enabled savings of £15 million ($21.7 million) for the National Health Service.
The fine leveled today is the largest since the British competition authority’s was formed in 2014. (Note: £1 = $1.45).
(Sources: Danica Kirka, Associated Press and U.K. Competition and Markets Authority)
Filed Under: Drug Discovery