Bloomberg News

Glaxo Gets OFT Complaint for Paying to Delay Seroxat Copies

April 19, 2013

GlaxoSmithKline Plc (GSK) was sent an antitrust complaint by U.K. regulators who say the company may have colluded with generic-drug makers to keep copies of its Seroxat antidepressant off the market.

Glaxo, the U.K.’s biggest drugmaker, may have paid Alpharma Ltd., Generics (U.K.) Ltd. and a unit of Teva Pharmaceutical Industries Ltd. (TEVA) to delay the release of cheaper, copycat versions of the drug, the U.K. Office of Fair Trading said on its website. Seroxat was one of Glaxo’s best-selling drugs from 2002 through 2004, when the agreements were in place, 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,” said Ann Pope, a director at the OFT, referring to the U.K.’s publicly funded National Health Service.

Antitrust regulators on both sides of the Atlantic are focusing on how settlements between companies that make branded medicines and generics producers might harm consumers. Les Laboratoires Servier, H. Lundbeck A/S (LUN) and Teva, the world’s largest generic-drug maker, were sent statements of objections last year by the European Union’s antitrust watchdog over possible delays for generic drugs.

The OFT probe covers matters already examined by the EU without subsequent sanctions, David Daley, a spokesman for the London-based company, said by e-mail.

Fair Competition

Glaxo “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,” Daley said in an e-mail, referring to the active ingredient in Seroxat. “These arrangements actually resulted in generic versions of paroxetine entering the market before GSK’s patents had expired.”

Glaxo and the generic companies were sent so-called statements of objections, the OFT said. Daley said the company will need time to review the documents before considering any further action.

Glaxo shares declined 0.5 percent to 1,650 pence at 3:52 p.m. in London trading.

Complaint Confirmed

Nina Devlin, a spokeswoman for Mylan Inc. (MYL:US), which owns Generics U.K., confirmed the company received a copy of the complaint which related to a settlement with Glaxo in 2002. Generics U.K., which was a subsidiary of German drugmaker Merck KGaA (MRK) at the time, “intends to vigorously defend itself in this matter,” she said in an e-mailed statement. Phyllis Carter, a spokeswoman for Merck, said the company is reviewing the complaint.

Norton Healthcare Ltd., which was named in the complaint, was acquired by Teva after the period of investigation, Paul Williams, a spokesman for Teva, said in an e-mail. Teva doesn’t believe the agreement between Glaxo and Norton, which became IVAX before it was acquired, was anti-competitive and Teva will cooperate fully with authorities, he said.

Claims Settlement

David Belian, a spokesman for Actavis Inc. (ACT:US), which owns Alpharma and is based in the U.S., didn’t immediately respond to an e-mail seeking comment.

Since he became Glaxo’s chief executive officer in 2008, Andrew Witty has worked to resolve U.S. criminal and civil investigations of the company, resulting in a 2011 agreement to pay a $3 billion settlement of claims the company marketed drugs for unapproved uses and other matters. Witty was knighted last year by Queen Elizabeth II for services to the economy and the U.K. pharmaceutical industry.

Glaxo, AstraZeneca Plc (AZN), the U.K.’s second-biggest drugmaker, and Sanofi (SAN) are also among companies the Brussels-based commission has queried as part of its probes into the companies’ tactics to keep copies of their medicines off the market. Drug developers use a variety of techniques to delay generics, the EU said in a 2009 report.

Johnson & Johnson (JNJ:US) and Novartis AG (NOVN) in January were also sent complaints by the EU over a pay-for-delay deal that may have hampered the sale of generic versions of pain killer fentanyl in the Netherlands.

To contact the reporters on this story: Eva von Schaper in Munich at evonschaper@bloomberg.net; Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

To contact the editors responsible for this story: Kristen Hallam at khallam@bloomberg.net; Phil Serafino at pserafino@bloomberg.net; Anthony Aarons at aaarons@bloomberg.net


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Companies Mentioned

  • MYL
    (Mylan Inc/PA)
    • $48.6 USD
    • 0.47
    • 0.97%
  • ACT
    (Actavis plc)
    • $226.98 USD
    • 0.39
    • 0.17%
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