On 19 April 2013, the UK Office of Fair Trading (OFT) announced that it had issued a Statement of Objections (preliminary statement of case) 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 concern so-called ‘pay for delay’ agreements, where a manufacturer of branded pharmaceuticals makes payments (or other transfers of value) to a generic company in return for that generic company’s agreeing to delay its independent entry into the market.
The generic companies (Alpharma, Generics (UK) and Norton Healthcare) were each attempting to supply a generic paroxetine product in competition to the originator’s (GlaxoSmithKline [GSK]) branded paroxetine product. However, in each case, GSK challenged the generic companies with allegations that their products would infringe its patents. To resolve these disputes, each of the generic companies concluded one or more agreements with GSK.
The OFT’s provisional view is that these agreements included substantial payments to the generic companies in return for their commitment to delay their plans to supply paroxetine independently. This could, in the OFT’s view, amount to a breach of the EU and UK bans on anticompetitive agreements and an illegal abuse by GSK of its dominant position.
This case is similar to several at EU level and shows the continued interest by EU competition regulators in the issue of settlement agreements in the pharmaceutical sector. In principle, there is no reason why similar issues in other industries would not also raise similar issues.