UK OFT investigates GSK and generics manufacturers over pay for delay deals

On 19 April 2013 the UK Office of Fair Trading (“OFT”) issued a Statement of Objections to GlaxoSmithKline (“GSK”) and three generics manufacturers (Alpharma Limited, Generics UK Limited and Norton Healthcare Limited) alleging that they concluded anticompetitive agreements over the supply of paroxetine in the UK, notably to delay effective competition in the UK supply of paroxetine, a prominent antidepressant medicine, in breach of both the UK Competition Act 1998 and Article 101 of the Treaty on the Functioning of the European Union (“TFEU”). The OFT also alleges GSK’s conduct amounted to an abuse of a dominant position in the same market in breach of both the UK Competition Act 1998 and Article 102 TFEU.

In particular, according to the OFT, while the generics companies were each attempting to supply a generic paroxetine product in competition to GSK’s branded paroxetine product, Seroxat, GSK challenged the generic companies with allegations that their products would infringe GSK’s patents, and to resolve these disputes, each of the generic companies concluded one or more agreements with GSK. These agreements, so called “pay for delay” agreements, included substantial payments from GSK to the generics manufacturers in return for their commitment to delay their plans to supply paroxetine independently.

OFT’s Ann Pope noted that “The introduction of generic medicines can lead to strong competition on price, which can drive savings for the NHS, to the benefit of patients and, ultimately, taxpayers.” [Gabriele Accardo]