The Competition and Markets Authority (CMA) has fined a number of pharmaceuticals firms – including GlaxoSmithKline (GSK), Merck and Generics UK (GUK) – for anti-competitive conduct.
The £44.99 million total fine was imposed because of conduct and agreements between 2001 and 2004 wherein GSK agreed to make payments and other value transfers totalling over £50 million to suppliers of generic versions of paroxetine – an anti-depressant drug.
Cracking down on these practices is essential to protect consumers, to encourage legitimate business activity that such practices stifle, and to stimulate innovation and growth
CMA executive director for enforcement Michael Grenfell
According to the CMA, the payments were designed to delay the potential entry of generic versions of paroxetine.
The CMA also said the agreements potentially deprived the NHS of the significant price falls that generally result from generic competition.
In this case, when independent generic entry eventually took place at the end of 2003, average paroxetine prices dropped by over 70% in 2 years, the CMA said.
GSK’s share of the fine stands at roughly £37.6m, while fines of nearly £6m have been imposed on Merck (GUK’s former parent company) and GUK.
A further fine of £1.5m has been imposed on Actavis UK – formerly Alpharma – because of Alpharma’s agreement with GSK to prohibit its independent entry into the UK paroxetine market.
CMA executive director for enforcement Michael Grenfell 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.
“Cracking down on these practices is essential to protect consumers, to encourage legitimate business activity that such practices stifle, and to stimulate innovation and growth.”
GSK, however, has said it disagrees with the ruling by the CMA.
"GSK and the generics companies entered into these agreements at the time in order to settle costly, complex and uncertain patent disputes," a spokesman said.
"The agreements allowed the generics companies to enter the market early with a paroxetine product and ultimately enabled a saving of over £15million to the NHS."