CAT upholds infringement determination for pay for delay pharma offers

However, the Competition Appeal Tribunal (Tribunal) has imposed reduced fines of £ 27.1 million on the companies involved.

Patients rely on paroxetine to relieve symptoms of depression. GlaxoSmithKline plc (GSK) agreed to make payments totaling £ 50 million to other generic suppliers of paroxetine, including Generics (UK) Limited (GUK) and Alpharma Limited (Alpharma), to resolve patent disputes.

In a 2016 decision, the Competition and Markets Authority (CMA) found that these payments were aimed at delaying the potential entry of these generic competitors into the UK market and were illegal. The CMA fined the companies directly involved in the infringements and, where applicable, their parent companies or successors to those companies, totaling £ 44.99 million.

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In March 2018, the Tribunal rejected a number of companies’ appeals against the CMA’s decision and referred the remaining grounds to the Court of Justice of the European Union (ECJ) for a preliminary ruling on various questions of EU law. In January 2020, the ECJ issued a ruling confirming that this type of late payment agreement could restrict competition and constitute an abuse of a dominant position.

With today’s ruling by the tribunal, all of the pharmaceutical companies’ remaining appeals against the violations have been unanimously rejected. The Ministry of Health and Social Affairs can now apply for consequential damages in court.

Taking various factors into account, the tribunal lowered the CMA’s original fines imposed on the companies.

Michael Grenfell, Executive Director of Enforcement at the CMA, said:

We welcome the Tribunal’s findings that GSK and a number of generic suppliers have violated competition law. These agreements can cost the NHS and taxpayers millions of pounds. Today’s ruling sends a strong message that agreements between pharmaceutical companies aimed at delaying the introduction of generic drugs are illegal and will not be tolerated.

We note that the Tribunal recognizes that substantial fines were justified, but we are disappointed that it has reduced the fines imposed by the CMA for these serious competition law violations. We will now take stock of today’s judgment and carefully consider the next steps.

For more information about this investigation, please visit the Paroxetine investigation case page.

Notes for editors

1. The CMA’s decision imposed the following fines: a) GSK’s total fine was £ 37,606,275; b) In relation to GUK’s infringement, Merck KGaA (formerly GUK’s parent company) and GUK were fined a total of £ 5,841,286. c) Actavis UK Limited, Xellia Pharmaceutricals ApS and Alpharma LLC have been fined a total of £ 1,542,860 in relation to Alpharma’s breach.

2. The revised fines imposed by the CAT are: a) GSK’s total fine is £ 22,200,602; b) In relation to GUK’s infringement, Merck KGaA and GUK were fined a total of £ 3,894,191. c) Actavis UK Limited, Xelia Pharamceuticals ApS and Alpharma LLC have been fined a total of £ 1,028,574 in relation to Alpharma breach.

3. For media inquiries, please contact the CMA press office on 020 3738 6460 or press@cma.gov.uk.