GSK accused of illegal ‘pay for delay’ deals

seroxat_20mg GSK has been accused by the Office of Fair Trading of protecting its Seroxat revenues from 2001–2004 by illegally paying off three generic competitors.

The OFT claims that GSK abused its market position by making “substantial” payments to Alpharma, Generics (UK) and Norton Healthcare to delay their launch of generic paroxetine.

The deals meant that the NHS, which paid £100m for Seroxat in 2001, lost an opportunity for “significant” cost savings, the UK trading watchdog said.

Paroxetine, an SSRI that targets anxiety-based depression, has already caused GSK some anxiety.

In 2002, the company was fined $2bn by the US Government for illegally promoting the drug’s off-label use in children and young adults. CEO Sir Andrew Witty said GSK’s actions had been “unacceptable” and would “never” happen again.

The current OFT accusations relate to deals that applied from 2001 to 2004 – since which time, GSK’s paroxetine brands (Seroxat in the UK, Paxil in the US) have steadily lost ground to generic equivalents.

If found guilty of breaking competition law, GSK faces a UK fine of up to £2.6bn, 10% of its annual global revenue.

The OFT’s Ann Pope commented: “The introduction of generic medicines can lead to strong competition on price, which can drive savings for the NHS.

“It is therefore particularly important that the OFT fully investigates concerns that independent generic entry may have been delayed in this case.”

In a public statement, GSK said: “We very strongly believe that we acted within the law, as the holder of valid patents for paroxetine, in entering the agreements under investigation.”

It also noted that the European Commission had reviewed these issues and declared that it would take no action against GSK.

The company has until August to respond to the OFT’s charges.