GlaxoSmithKline accused of pay-for-delay deal

Drugs giant GlaxoSmithKline was today accused by the UK's competition watchdog of paying off firms to delay the launch of cheap versions of its antidepressant treatment in a move that denied the British National Health Service “significant” cost savings.

The UK's Office of Fair Trading (OFT) is alleging that Glaxo offered “substantial” payments to Alpharma, Generics and Norton Healthcare, to hold off from supplying rival medicines to its blockbuster Seroxat treatment.

Glaxo’s rivals were attempting to supply a generic paroxetine product in competition to Seroxat, but Glaxo accused each of infringing its patents and to resolve the disputes, they effectively agreed to be paid off, according to the OFT.

The alleged actions by all the firms involved are a potential infringement of competition law, while Glaxo is also accused of abusing its dominant position in the 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.”

The OFT said the firms will now be asked to respond to its allegations before deciding if competition law has been infringed.