GSK fined £37.6m for '˜stifling' drug competition

DRUGS giant GlaxoSmithKline has been fined almost £38 million for breaching competition law in relation to the supply of an anti-depressant.

GSK has been fined for tring to delay the launch of rival generic products. Picture: GSK

The Competition & Markets Authority (CMA), which yesterday handed out penalties totalling £45m over the issue, said GSK had agreed to make payments “and other value transfers” of more than £50m to suppliers of generic versions of paroxetine in a bid to delay the potential entry of rivals to the market.

The CMA said: “In 2001, a number of pharmaceutical companies – including Generics (UK) Limited (GUK) and Alpharma Limited (Alpharma) – were taking steps to enter the UK market for paroxetine with a generic version. GSK’s own branded version of paroxetine, Seroxat, was a ‘blockbuster’ product: in the UK, 4.2 million prescriptions were issued for Seroxat in 2000 and Seroxat sales exceeded £90m in 2001. At the time GSK held certain patents in relation to paroxetine.

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“GSK challenged these pharmaceutical companies, alleging that their generic products would infringe its patents, and commenced litigation proceedings against GUK and Alpharma. Before that litigation went to trial, GUK and Alpharma each entered into agreements with GSK, which included terms prohibiting their independent entry into the UK paroxetine market.”

The competition watchdog said GSK’s agreements with GUK and Alpharma broke the competition law prohibition on anti-competitive agreements. It also found that the group’s conduct in making payments to the two companies and one further firm, Norton Healthcare, to induce them to delay their efforts to enter the UK paroxetine market, “infringed the competition law prohibition on abuse of a dominant position”.

GSK was handed a fine of £37.6m, while total penalties of more than £5.8m were imposed on GUK and its former parent, Merck. A further £1.5m fine was dished out to companies linked to the former Alpharma business.

GSK disputed the CMA’s ruling and said it was considering an appeal, adding that its agreements with the generic firms allowed them to enter the market early, saving the NHS £15m over two years from 2002.

It said: “GSK disagrees with the ruling by the UK CMA. GSK and the generics companies entered into these agreements at the time in order to settle costly, complex and uncertain patent disputes.”

The fine is the largest since CMA’s inception in 2014.