Pay for delay?! Watch out…. Antitrust !!!

UK alleges GSK paid off competitors to delay drugs; GSK to 'cooperate' with probe By Wire reports RESEARCH TRIANGLE PARK, N.C. — GlaxoSmithKline (NYSE: GSK) has been sent an antitrust complaint by U.K. regulators who say the company may have colluded with generic-drug makers to keep copies of its Seroxat antidepressant off the market. GSK issued a statement saying it would cooperate with the investigation. Glaxo, which operates its North American headquarters in RTP, may have paid Alpharma Ltd., Generics (U.K.) Ltd. and a unit of Teva Pharmaceutical Industries Ltd. to delay the release of cheaper, copycat versions of the drug, the U.K. Office of Fair Trading said on its website. Seroxat was one of Glaxo's best-selling drugs from 2002 through 2004, when the agreements were in place, the OFT said.The Office of Fair Trading said GSK's conduct amounted to an abuse of its dominant position in the same market."The introduction of generic medicines can lead to strong competition on price, which can drive savings for the (National Health Service), to the benefit of patients and, ultimately, taxpayers," said Ann Pope, the 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 OFT alleges that when the generic drug companies tried to compete with Seroxat, GSK challenged them with allegations that their products would infringe upon GSK patents. To settle the disputes, the generic companies would receive payment from GSK, the OFT claimed.The drug company said in a statement that it would fully cooperate with the investigation, which it said stemmed from activities that occurred between 2001 and 2004.The company also said that the inquiry examines issues investigated by two European Commission inquiries, neither of which resulted in sanction."GSK supports fair competition and we very strongly believe that we acted within the law," the statement said.The company also said it had noted the OFT's plan to issue what is known as a Statement of Objections.Pope said the OFT would carefully consider what the companies said in response to their accusations before deciding whether they should be sanctioned. If The OFT decides the "pay for delay" agreements were unacceptable, it can impose fines of up to 30 percent of revenue over the timeframe in which the violations occurred.The OFT probe covers matters already examined by the EU without subsequent sanctions, David Daley, a spokesman for the London-based company, said in an email to Bloomberg news.Glaxo and the generic companies were sent so-called statements of objections, the OFT said. Daley said the company will need time to review the documents before considering any further action.U.S. SettlementSince he became Glaxo's chief executive officer in 2008, Andrew Witty has worked to resolve U.S. criminal and civil investigations of the company, resulting in a 2011 agreement to pay a $3 billion settlement of claims the company marketed drugs for unapproved uses and other matters. Witty was knighted last year by Queen Elizabeth II for services to the economy and the U.K. pharmaceutical industry.Glaxo, AstraZeneca Plc, the U.K.'s second-biggest drugmaker, and Sanofi are also among companies the Brussels- based commission has queried as part of its probes into the companies' tactics to keep copies of their medicines off the market. Drug developers use a variety of techniques to delay generics, the EU said in a 2009 report.Johnson & Johnson and Novartis AG in January were also sent complaints by the EU over a pay-for-delay deal that may have hampered the sale of generic versions of pain killer fentanyl in the Netherlands.