GSK accused of paying off rivals to delay entry of generic drugs

British drugmaker GlaxoSmithKline (GSK) has been accused by the regulator of paying off rivals to delay the entry of cheaper generic version of its antidepressant drug Seroxat in the market.

The UK Office of Fair Trading (OFT) today said that GSK has made substantial payments to three smaller rivals to stop them from releasing generic version of its paroxetine anti-depressant drug Seroxat,

Alpharma, Generics UK and Norton Healthcare all received money not to enter the market with their version of Seroxat, the OFT said in a statement of objections released today.

''The OFT alleges GSK concluded agreements which infringed competition law with each of Alpharma, Generics (UK) Ltd and Norton Healthcare Ltd,  ('the generic companies'), over the supply of paroxetine in the UK.

Seroxat was one of GSK's best selling drugs and was used to treat depression and anxiety disorders.

The allegations in this case concern so called 'pay for delay' agreements, where a manufacturer of a branded drug pays a generic company to delay bringing out a generic version into the market.

The OFT said that GSK's conduct amounted to an abuse of a dominant position in the same market.

The OFT alleges that the three generic companies were each trying to bring a generic version of paroxetine in competition to GSK's branded Seroxat, but, in each case, GSK challenged the generic companies' with allegations that their products would infringe its patents.

To resolve these disputes, it signed one or more agreements with each of the generic companies, said the OFT.

The OFT goes on to allege 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.

GSK, Britain's biggest pharmaceutical company, said that the allegations cover activities that happened between 2001 and 2004 and the paroxetine supply agreements under investigation were terminated in 2004.

The European Commission had also launched a similar investigation in 2005-2006 and ended its inquiring in March 2012 with no further action and no sanctions.

Ann Pope, senior director 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.''

If GSK is found guilty, it can be fined up to 10 per cent of its global turnover.