Today’s Decision! UK watchdog fines GSK $54 mln over ‘pay-for-delay’ drug deals

Britain’s rivalry body said on Friday it had fined GlaxoSmithKline (GSK.L) 37.6 million pounds ($54.4 million) for market exploitation in striking deals to delay the launch of cheap generic copies of its antidepressant Seroxat.

GSK said it was contemplating reasons for appeal.

The move from the Competition and Markets Authority (CMA) is the most recent example of regulators attempting to control “pay-for-delay” deals by drug companies and follows preceding activities by U.S. and European antitrust authorities.

The CMA accused of abusing its position over the previous hit medication in April 2013, GSK, but it’s just handed out fines.

“Today’s decision sends out a powerful message that we are going to undertake prohibited conduct that was created to stifle competition in the expense of consumers,” CMA enforcement head Michael Grenfell said in a statement.

GSK said it firmly differed consumers had been hurt by the deals and claimed they’d really brought down the price of medication for the state-run health service.

The case relates to deals struck over a decade past. Since then the patents protecting the active component in Seroxat, paroxetine, have expired as well as the arrangements under investigation happen to be terminated.

GSK, nevertheless, claims the deals reached to settle patent disputes that are complicated, expensive and unclear.

“The arrangements permitted the generics firms to enter the marketplace early with a paroxetine merchandise and finally empowered a saving of over 15 million pounds to the NHS,” the firm said.

The problem of brand name pharmaceutical companies paying manufacturers of generic drugs to fall patent challenges was in 2008-2009, which failed to result in virtually any actions against GSK at the center of a European overview of the sector.