- U.K. antitrust regulator says deals blocked generic drugs
- Generic drug makers are also fined for 2001-2004 deals
GlaxoSmithKline Plc was fined 37.6 million pounds ($54.3 million) by the U.K.’s antitrust watchdog over pay-for-delay deals that held back sales of cheaper, generic versions of its anti-depressant Seroxat.
The London-based drugmaker colluded with other companies from 2001 to 2004 by agreeing to make payments “and other value transfers totaling over 50 million pounds to suppliers of generic versions of paroxetine,” the Competition and Markets Authority said in a statement Friday.
“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,” the CMA said. “In this case, when independent generic entry eventually took place at the end of 2003, average paroxetine prices dropped by over 70 percent in two years.”
Antitrust regulators on both sides of the Atlantic for years have focused on how settlements between companies that make branded medicines and generics producers might harm consumers. H. Lundbeck A/S was fined 93.8 million euros ($105.4 million) by the European Commission in 2013. A year later, the European Union regulator fined Les Laboratoires Servier and Teva Pharmaceutical Industries Ltd. 427.7 million euros over pacts that delayed the release of cheaper versions of a hypertension treatment.
“Today’s decision sends out a strong message that we will tackle illegal behavior that is designed to stifle competition at the expense of customers -- in this case, the NHS and, ultimately, taxpayers,” said Michael Grenfell, the CMA’s executive director for enforcement.
Glaxo said it disagreed with the CMA’s decision and that the deals it struck with generics makers were to “settle costly, complex and uncertain patent disputes.”
“The agreements allowed the generics companies to enter the market early with a paroxetine product and ultimately enabled a saving of over 15 million pounds” to the health service, Glaxo said in an e-mailed statement. “GSK is considering its grounds for appeal.”
Mylan NV and German drugmaker Merck KGaA were also fined a total of 5.8 million pounds as part of the probe. The CMA said it also levied a 1.5 million-pound penalty on Actavis U.K. Ltd., which was Alpharma Ltd. before, Xellia Pharmaceuticals ApS, formerly called Alpharma ApS, and on Alpharma LLC, which previously was Zoetis Products LLC, Alpharma LLC and Alpharma Inc.
“This is the first case in relation to this type of patent-settlement agreement in the U.K.,” Darmstadt, Germany-based Merck said in an e-mailed statement. “Merck was not a contract party to the agreement between” Mylan and Glaxo and was held jointly liable as the former owner of Generics (U.K.) Ltd, now Mylan.
“Merck has already made adequate provision for this,” the company said, adding it will weigh whether to appeal the decision. “The fine will not, therefore, have a material impact on Merck’s financial results.”
Mylan said the decision “relates to a settlement agreement entered into by Generics (U.K.) Ltd.” with Glaxo to resolve a patent dispute over paroxetine in the U.K. “We are reviewing the decision, however, we continue to believe that the settlement was legal and we intend to appeal.”
Allergan Plc said it will review the decision and declined to comment further.