Proactive Investors - Run By Investors For Investors

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.

View full GSK profile View Profile

GlaxoSmithKline plc Timeline

Related Articles

girl sneezing
February 12 2018
The Phase II study of its PQ Grass immunotherapy, an aluminium-free, ultra-short course hay fever treatment, is designed to evaluate dose response and safety
February 08 2018
The subsector in which Abezena is active in (monoclonal antibody and conjugated monoclonal antibodies) could expand to US$180bn, Peel Hunt’s research suggests
picture of genes
November 29 2017
Among those cited as using Silence’s tech is US firm Alnylam, valued at US$12.7bn.

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use