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LONDON (Alliance News) - The UK Competition & Markets Authority on Friday said it has fined a number of pharmaceutical companies, including GlaxoSmithKline PLC, for anti-competitive conduct and agreements in relation to the supply of anti-depressant paroxetine.
The bulk of the fine was imposed on London-listed GlaxoSmithKline, which shouldered GBP37.6 million of the GBP45.0 million total. Merck KGaA, the former parent of Generics (UK) Ltd, was fined GBP5.8 million. The remaining GBP1.5 million was shared by Actavis UK Ltd, formerly Alpharma Ltd, Xellia Pharmaceuticals ApS, formerly Alpharma ApS, and Alpharma LLC, formerly Zoetis Products LLC, Alpharma LLC and Alpharma Inc.
The fines were imposed due to conduct and agreements between 2001 and 2004. Glaxo, which supplied paroxetine branded as Seroxat, agreed to make payments and other value transfers worth more than GBP50.0 million to suppliers of the generic versions of the anti-depressant, which according to the CMA were aimed at delaying the potential entry of generic competitors into the UK market.
Among the pharmaceutical companies taking steps to enter the UK market with a generic version of the medicine were Generics (UK) Ltd (GUK) and Alpharma Ltd. According to the CMA, Glaxo's Seroxat was a "blockbuster" product at the time, with 4.2 million prescriptions issued in 2000 and sales of GBP90 million the following year.
"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 CMA said.
"These 'pay-for-delay' agreements deferred the competition that the threat of independent generic entry could offer, and potentially deprived the National Health Service of the significant price falls that generally result from generic competition. In this case, when independent generic entry eventually took place at the end of 2003, average paroxetine prices dropped by over 70% in two years," the CMA added.
The CMA found that Glaxo's agreements with each of GUK and Alpharma infringed the competition law prohibition on anti-competitive agreements. It also found that Glaxo's move to make payments to GUK, Alpharma and Norton Healthcare Ltd, in an effort to delay their efforts to enter the UK paroxetine market, infringed the competition law prohibition on abuse of a dominant position.
"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," Michael Grenfell, the CMA's executive director for enforcement, said.
"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," Grenfell added.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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