Glaxo accused of paying off competitors

GlaxoSmithKline (GSK) is being investigated over claims it paid off firms to delay the launch of cheap versions of its anti-depression drug, according to reports Friday.

The UK's Office of Fair Trading (OFT) said GSK offered payments to Alpharma, Generics and Norton Healthcare, to postpone the release of rival medicines to its Seroxat treatment.

The move denied the NHS significant cost savings, OFT alleged.

GSK has been accused of abusing its dominant position in the market and breaking competition law.

GSK's competitors were set to introduce a generic paroxetine product but they were suspected of infringing patents.

In order to resolve the dispute, they agreed to be paid off by GSK, the OFT said. They are also being probed for allegedly overstepping competition law.

"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," said Ann Pope, Senior Director of Services, Infrastructure and Public Markets at the OFT.

"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 was co-operating with the OFT in its investigation which covers activities between 2001 and 2004.

"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," the group said in a statement.

"These arrangements resulted in other paroxetine products entering the market before GSK's patents had expired."

Seroxat, one of GSK's best-selling medicines, has been whacked by generic competition in recent years. Sales fell 14% in 2012 to £374m and by nearly a fifth in the final three months of last year.

Last year the company was fined $3.0bn in the US for paying medics to prescribe the drug for children even though was not intended for under 18s.

RD