GlaxoSmithKline and generic pharma firms fined £45m for anti-competitive conduct

GSK Fined £37.6m Over Deals to Stifle Drug Competition

Drug giant GlaxoSmithKline (GSK) and a number of generic pharmaceuticals firms have been fined £45 million for anti-competitive practices.

The fine was handed down by the Competition and Markets Authority (CMA) which said Glaxo made more than £50 million of payments to companies making cheaper generic versions of its anti-depressant Seroxat to delay them coming to market.

GSK has been fined £37.6 million and the generic firms have to pay £7.4 million, for conduct and agreements between 2001 and 2004. Seroxat is Glaxo's branded paroxetine anti-depressant treatment.

The two main generics firms fined are Generics UK and Alpharma.

The CMA said the "pay-for-delay agreements" Glaxo struck with the generic firms "potentially deprived the National Health Service (NHS) of the significant price falls that generally result from generic competition".

But Glaxo disagrees with the CMA ruling, saying its agreements with the generic firms allowed them to enter the market early, saving the NHS £15 million over two years from 2002.

The drug giant 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 agreements allowed the generics companies to enter the market early with a paroxetine product and ultimately enabled a saving of over £15 million to the NHS.

"GSK is considering its grounds for appeal."

However, the CMA said when independent generic drugs eventually entered this market at the end of 2003, average paroxetine prices dropped by over 70% over two years.

The watchdog added that in the UK 4.2 million prescriptions were issued for Seroxat in 2000, and Seroxat sales topped £90 million the following year.

Michael Grenfell, the CMA's executive director for enforcement, said: "Today'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."