EU Court ruling in pay-for-delay drug case

The European Court of Justice today issued a ruling in relation to the case that drug companies supplying an antidepressant called paroxetine broke the law.

The ruling follows appeals from GlaxoSmithKline (LSE: GSK) and other pharmaceutical companies against the UK Competition and Markets Authority’s (CMA) decision that they had broken competition law. The CMA imposed fines of £45 million ($58.5 million at current exchange rates) on the companies involved.

When GSK’s principal patent expired in 1999, a number of manufacturers of generic medicines contemplated introducing generic paroxetine on the UK market. Against that background, GSK brought infringement proceedings against those manufacturers of generic medicines, and the latter challenged the validity of one of GSK’s secondary patents. GSK and the manufacturers of generic medicines thereafter concluded settlement agreements with respect to those disputes, whereby the latter chose to refrain, for an agreed period, from entering the market with their own generic medicines, in return for payments made by GSK.