Legal Update - Pay to Delay Agreements

Commercial Law – Competition – Pharmaceutical Companies – Generics – GSK

On 19 April 2013, the UK Office of Fair Trading (“OFT”) issued a Statement of Objections to a number of pharmaceutical companies alleging that they acted to delay effective competition in the UK supply of paroxetine, a prominent antidepressant medicine.

The allegations are around agreements made between GlaxoSmithKline (“GSK”) and a number of other generic pharmaceutical companies, including Alpharma, Generics (UK) and Norton Healthcare, whereby the generic companies agreed to delay their independent entry into the UK market, in return for payments.

Agreements

The generic companies were each attempting to enter the UK market with its generic paroxetine. In each case, it was seen that GSK alleged that the generic products would infringe GSK’s patents. Each of these disputes were resolved by agreements with GSK.

OFT’s Position

The OFT’s view is that the agreements entered into between GSK and each of the generic companies included substantial payments in return for delays.

It stated in its press release that “the OFT considers that if companies act to delay the potential emergence of generic competition the NHS may be denied significant cost savings”.

For further background, including a case timetable, see the OFT’s website.

For any queries, you may contact us by email [email protected]. Visit http://www.rtcoopers.com/ebusiness.php and http://www.rtcoopers.com/practice_pharmaceuticals.php.  

© RT COOPERS, 2013. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.