Glaxo accused of market 'abuse'

19 April 2013 Last updated at 03:54 ET

GlaxoSmithKline (GSK) has been accused of market "abuse" by the consumer watchdog, the Office of Fair Trading (OFT).

The OFT alleges that the pharmaceutical giant paid rivals to delay the release their own versions of GSK's Seroxat treatment.

Alpharma, Generics UK and Norton Healthcare all received money not to enter the market with their copies of Seroxat, it said.

GSK said it "acted within the law".

"GSK supports fair competition," it said.

"In fact, these arrangements actually resulted in generic versions of paroxetine entering the market before GSK's patents had expired," the company said in a statement.

Moreover, it added that "the OFT investigation covers matters that have already been investigated by the European Commission in 2005-2006".

"In March 2012 the Commission announced that it had formally concluded its enquiry with no further action," it said.

"The issues were also reviewed in the European Commission's 2008-2009 Sector Inquiry. Neither investigation resulted in any sanctions against the company."

Dominant player

The generic drug makers were attempting to supply the UK market with their versions of paroxetine, which GlaxoSmithKline brands as Seroxat, the OFT said. Seroxat is used to treat depression.

GSK accused them of infringing its patent, so to resolve this dispute Glaxo effectively paid the three companies off, according to the OFT.

"The paroxetine supply agreements under investigation were terminated in 2004," GSK said.

If proven, the allegations would be an infringement on the part of all the parties of competition law and on the part of GlaxoSmithKline an abuse of its dominant place in the market.

"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."

The firms will now be asked to respond to its allegations, before the OFT makes a decision on whether or not competition law has been infringed.