The Free Press, Mankato, MN

April 19, 2013

Drug maker accused of paying rival generic maker

GlaxoSmithKline target of investigation


Associated Press

WASHINGTON —

GlaxoSmithKline has been accused of paying other drugs companies to slow down production of generic versions of its most profitable antidepressant drug, according to the Office of Fair Trading.

An investigation into GSK has been launched by the OFT into allegations the company abused its market dominance by agreeing so-called "pay for delay" agreements between 2001 and 2004 to protect the position of its drug Seroxat.

GSK admitted agreements were reached but said they did not lead to delays in the generic versions coming to market.

Ann Pope, senior director of services, infrastructure and public markets at the OFT, said: "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.

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

GSK said it refuted the allegations, adding that two similar investigations by the EU had concluded there was no wrongdoing.

But the OFT appears determined to discover if Alpharma, Genetics UK and Norton Healthcare were paid by GSK to delay production.

In a statement, the regulator claimed: "The generic companies were each attempting to supply a generic paroxetine product in competition to GSK's branded paroxetine product, Seroxat. However, in each case, GSK challenged the generic companies with allegations that their products would infringe GSK's patents. To resolve these disputes, each of the generic companies concluded one or more agreements with GSK.

"The OFT's provisional view is that these agreements included substantial payments from GSK to the generic companies in return for their commitment to delay their plans to supply paroxetine independently."

Seroxat, which is still available on the NHS, was launched in the early 1990s and became one of the biggest-selling drugs in the world, overtaking Prozac.

However, the patent came to an end in 2004 and generic, cheaper versions flooded the market, hitting profits.

A spokesman for the pharmaceutical giant said: "GSK supports fair competition and we very strongly believe that we acted within the law, as the holder of valid patents for paroxetine, in entering the agreements under investigation. These arrangements actually resulted in generic versions of paroxetine entering the market before GSK's patents had expired."

A spokeswoman for Pfizer, owners of Alpharma, said: "We are reviewing the statement of objections as it relates to a business Alpharma divested years before its acquisition by King. Pfizer, which subsequently acquired King, did not have any knowledge about this agreement, which dates to 2002. We will fully co-operate with the Office of Fair Trading regarding this matter."

A spokesman for Norton Healthcare in the US said he was unaware of the allegations and would issue a statement shortly.

Generics UK was unavailable for comment.