GSK’s Seroxat pay-for-delay deals may restrict competition: AG
GlaxoSmithKline (GSK) may have restricted competition by making a deal with generic drugmakers to delay the launch of copies of an antidepressant, according to an adviser to the Court of Justice of the European Union (CJEU).
Yesterday, January 22, advocate general Juliane Kokott advised Europe’s highest court to find that these so-called pay-for-delay deals “may be regarded as a restriction of competition”.
While Kokott’s opinion is not binding, and the CJEU may decline to follow the reasoning, it does carry weight.
The AG believes the court should uphold a penalty of £37 million ($48.6 million) imposed by the UK government for “anti-competitive conduct” centring on anti-depressant drug Seroxat (paroxetine).
The Competition and Markets Authority (CMA) had concluded that, between 2001 and 2004, GSK agreed deals with two generic drug makers to pay more than £50 million to prevent the launch of generic versions of Seroxat.
At the time of the deals, Seroxat was known as a ‘blockbuster’ drug. In 2001 UK sales exceed £90 million, according to the CMA.
GSK challenged the fine before the UK’s Competition Appeal Tribunal, which requested guidance from the CJEU on whether the settlements might constitute a restriction of competition and constitute an abuse of a dominant position in the market.
In addition to finding that a pay-for-delay deal might breach competition rules, the AG also found that entering into such an agreement may be an abuse of a dominant position.
She said that, if the sole consideration for the payment is an undertaking by the generic maker not to enter the market or challenge the patent, the deal restricts competition.
“The AG states, however, that the assessment of whether there is a restriction of competition by object must include, where appropriate, an assessment of the benefits to consumers afforded by the agreements at issue since, depending on their nature and their significance, such benefits may cast doubt on the anti-competitive object of those agreements,” said a press release from the court.
It added: “However, subject to matters to be determined by the Competition Appeal Tribunal, that does not appear to be so in the present case.”
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