UK's OFT accuses GlaxoSmithKline of "market abuse"

The UK’s Office of Fair Trading (OFT) today (April 19) issued a Statement of Objections to certain pharmaceutical companies alleging they acted to delay effective competition in the UK supply of paroxetine, an antidepressant marketed by UK pharma giant GlaxoSmithKline (LSE: GSK) as Seroxat. Known as Paxil in the USA, the drug was one of GSK’s biggest selling products before losing its European patent in 2006.

The OFT alleges GSK concluded agreements which infringed competition law with each of Alpharma, Generics (UK) and Norton Healthcare, over the supply of paroxetine in the UK. The OFT also alleges GSK's conduct amounted to an abuse of a dominant position in the same market. The allegations in this case concern so called “pay-for-delay” deals, where a manufacturer of branded pharmaceuticals makes payments (or other transfers of value) to a generic company in return for it agreeing to delay its independent entry into the market.

The generic companies were each attempting to supply a generic paroxetine product in competition to GSK's branded 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 said.