GlaxoSmithKline accused of deal to delay release of generic versions of anti-depressant drug

OFT says move denied the NHS 'significant' cost savings

The Office of Fair Trading today accused drugs giant GlaxoSmithKline of abusing its dominant market position over sales of one of its best-selling medicines.

The watchdog alleges that GSK made “substantial payments” to three other companies that were planning to produce generic versions of the anti-depressant drug paroxetine, which GSK sold under the brand Seroxat in the UK. The companies then delayed generic launches, it claimed.

The OFT says that the market fixing could have cost the NHS large amounts of money because it had to continue buying the high-margin, branded drug rather than much cheaper generics.

If the OFT were to find that GSK and the other three companies involved broke competition law it could fine them up to 10% of their worldwide turnover. In GSK’s case that could amount to hundreds of millions of pounds.

Annual UK sales of Seroxat from 2001 to 2004, the years that are under scrutiny, were about £100 million — most of which was bought through the NHS.

The OFT said that GSK had challenged three companies — Alpharma, Generics and Norton Healthcare — alleging that they would be infringing its patents.

It then reached settlements with them involving substantial payments to delay their plans to supply paroxetine independently, according to the OFT.

Ann Pope, senior director of services, infrastructure and public markets at the OFT, said: “The introduction of generic medicines can lead to strong competition on price, which can drive savings for the NHS, to the benefit of patients and, ultimately, taxpayers. It is therefore particularly important that the OFT fully investigates concerns that independent generic entry may have been delayed in this case.”

But she added: “No assumption can be made at this stage that there has been an infringement of competition law.”

In a statement, the company said: “GSK supports fair competition and we very strongly believe that we acted within the law, as the holder of valid patents for paroxetine, in entering the agreements under investigation. These arrangements resulted in other paroxetine products entering the market before GSK’s patents had expired.”

It continued: “We have co-operated fully with the Office of Fair Trading in this investigation, which covers activities that happened between 2001 and 2004. The paroxetine supply agreement were terminated in 2004.”

GSK and the three generic companies have until August to respond to the OFT’s “statement of objections”.

Seroxat was first marketed by GSK in 1992 and patents began to expire in 2003 since when sales have fallen sharply as generic versions took its place.

GSK was fined $3 billion (£2 billion) last summer in the biggest healthcare fraud in US history after it admitted paying doctors to prescribe the drug for children although it was not intended for under-18s.

Afterwards, the company admitted “unacceptable” mistakes and chief executive Sir Andrew Witty pledged “this is never going to happen again”.

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