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Glaxo fined £38mln for Seroxat deal 15 years ago

The CMA levied the £45mln penalties for ‘pay and delay’ agreements
Glaxo fined £38mln for Seroxat deal 15 years ago
After generic paroxetine was launched in 2003, average prices dropped by over 70% in 2 years.

-- adds Glaxo response --

GlaxoSmithKline (LON:GSK) has been fined £37.6mln and two rivals £7.5mln over a deal that delayed the entry of  a UK generic version of anti-depressant paroxetine.

The Competition and Markets Authority levied the £45mln penalties for ‘pay and delay’ agreements arranged by the trio between 2001 and 2004.

The regulator said Glaxo paid two companies, Generics (UK) and Alpharma, £50mln to halt their launch of own brand versions of paroxetine.

At the time, its branded version, Seroxat, was a blockbuster product generating sales of £90mln in 2001 with more than 4.2mln prescriptions.

Glaxo had started legal proceedings against both for patent infringement but before the court action started signed the ‘pay-for-delay’ deals prohibiting their entry into the UK paroxetine market.   

These agreements potentially deprived the National Health Service of the significant price falls that generally result from generic competition, said the CMA.

After generic paroxetine was launched in 2003, average prices dropped by over 70% in 2 years.

Merck, which was Generics parent at the time, was fined £5.8mln and Alpharma £1.5mln.

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.”

Glaxo, however, disagreed with the decision and said it might appeal.  It said the agreements saved the NHS £15mln, contrary to the CMA’s claims, and allowed the generic drugs to enter the UK market early.

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