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GSK fined GBP 37.6 million in pay-for-delay appeal Posted 30/03/2018

GlaxoSmithKline (GSK) has lost its appeal over a pay-for-delay case dating back to the early 2000s and involving its now off-patent antidepressant Seroxat/Paxil (paroxetine).

The case concerns agreements made between 2001 and 2004 in which GSK, the supplier of brand-name antidepressant drug Seroxat (paroxetine), agreed to make payments and other value transfers totalling over GBP 50 million to suppliers of paroxetine generics [1].

The UK’s Competition and Markets Authority (CMA) said that these ‘pay-for-delay’ agreements deferred the competition and as a result, the UK’s National Health System (NHS) had to pay higher prices for the drug. It said GSK sales of Seroxat (paroxetine) were GBP 90 million in 2001 alone, but when generics entered the market in 2003, prices dropped by 70% in two years. The CMA therefore fined GSK in February 2016 for anticompetitive conduct and agreements in relation to the supply of paroxetine [1].

GSK appealed this decision, arguing that ‘the CMA erred in finding that GSK’s conduct had the likely effect of restricting competition’ and contends that ‘the CMA erred in imposing any fine on GSK’. The drugmaker requested that the Competition Appeal Tribunal set aside the decisions made by the CMA or, alternatively, annul or substantially reduce the fine imposed and order the CMA to pay the costs incurred by GSK in this appeal [2].

The UK Competition Appeal Tribunal, however, agreed with the ruling made by the CMA in 2016 and upheld the decision that GSK’s conduct and agreements made in relation to the supply of paroxetine were anticompetitive.

The tribunal announced on 12 March 2018 that it had dismissed the appeals brought by GSK, Generics (UK) GUK and Xellia Pharmaceuticals, Alpharma LLC, Actavis UK and Merck KGaA.

However, there may still be a glimmer of hope for the companies, as the appeals tribunal has referred ‘all substantive points’ to the European Court of Justice, GSK acknowledged in a statement. As this judgment is still pending, it said it would not comment further.

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References
1. GaBI Online - Generics and Biosimilars Initiative. UK’s competition authority fines GSK for pay-for-delay [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2018 Mar 30]. Available from: www.gabionline.net/Policies-Legislation/UK-s-competition-authority-fines-GSK-for-pay-for-delay
2. GaBI Online - Generics and Biosimilars Initiative. GSK appeals UK pay-for-delay fine [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2018 Mar 30]. Available from: www.gabionline.net/Generics/News/GSK-appeals-UK-pay-for-delay-fine

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Source: Chemanager, UK Competition Appeal Tribunal

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