Glaxo fined £37.6m for ‘illegal behaviour’ over Seroxat deals


GlaxoSmithKline has been fined £37.6m by Britain’s competition authority for anti-competitive behaviour in relation to its antidepressant Seroxat, reports The Guardian.

The Competition & Markets Authority said the pharmaceutical firm had paid generic drugmakers more than £50m between 2001 and 2004 in return for them delaying the launch of cheaper versions of the blockbuster drug.

GSK said it did not accept the CMA’s ruling and that its actions had saved the NHS money. The group is considering an appeal.

The generic drugmakers involved, Generics UK Limited (GUK) and Alpharma, were also fined, bringing the total penalties imposed to £45m. GUK’s former parent Merck was fined £5.8m and further penalties of £1.5m were imposed on Alpharma and its parent Actavis.

The CMA said that the “pay-for-delay” agreements “potentially deprived the NHS of the significant price falls that generally result from generic competition”. In this case, when generic copies came on to the market at the end of 2003, average prices dropped by more than 70% in two years.

The CMA found that GSK’s agreements with GUK and Alpharma broke the law on anti-competitive deals.

However, GSK said: “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 [the active ingredient in Seroxat] product and ultimately enabled a saving of over £15m to the NHS.”

Michael Grenfell, the CMA’s executive director for enforcement, said: “[Friday’s] decision sends out a strong message that we will tackle illegal behaviour that is designed to stifle competition at the expense of customers – in this case, the NHS and, ultimately, taxpayers.

“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.”

In the UK, 4.2m prescriptions were issued for Seroxat in 2000 and sales exceeded £90m in 2001. GSK initially challenged the generic firms, alleging that their products would infringe its patents and brought litigation proceedings against GUK and Alpharma, but before litigation went to trial it struck deals with them.