GlaxoSmithKline (GSK) has been fined £38m for stifling the launch of a cheap rival to its anti-depression drug Seroxat, the generic form of which is known as paroxetine. The fine relates to more than £50m worth of payments the UK pharmaceuticals giant agreed to make to competitors developing generic products between 2001 and 2004.
Coming after a five-year case, the fine is the largest imposed by the Competition and Markets Authority since its creation in 2014. Its executive director of enforcement Michael Grenfell said the decision sent 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".
GSK disagreed with the finding and is considering appealing the charge. The group rejects the agreement being branded a 'pay-for-delay' deal. It has said it was in fact an out-of-court settlement with the generic competitors which was entered into “in order to settle costly, complex and uncertain patent disputes” surrounding the Seroxat drug. A spokesperson added this allowed generic paroxetine products to enter the market early, saving the NHS £15m.
Regulatory bodies are increasingly targeting 'pay-for-delay' deals, where a brand-name drug company pays a would-be competitor to delay selling a generic version of the drug. This is no small problem. Stateside, consumer interest group U.S. PIRG estimates that as many as 142 brand-name drugs were delayed by pay-for-delay arrangements between 2005 and 2013, drawing on official US figures. In the UK, the Financial Times has reported that the CMA opened a probe against an undisclosed pharmaceutical company in December.
The fine was a blow to GSK's reputation, which chief executive Andrew Witty has been working to rebuild following a string of scandals. In 2014, the company confessed to “massive and systemic” corruption in China which led to a £297m fine and a three-year suspended jail sentence for the head of China GSK.
