EU Adviser Slams Drugmaker Over Pay-for-Delay Deals

LUXEMBOURG (CN) – Paying to delay the production of generic drugs violates European Union competition regulations, an adviser to the EU’s highest court said Wednesday.

The advisory opinion of European Court of Justice Advocate General Juliane Kokott, which is only available in French, held that deals between GlaxoSmithKline and competitors to keep generic versions of the antidepressant paroxetine off the market “may constitute a restriction of competition.”

Though advisory opinions are nonbinding, rulings from the Court of Justice often follow the same legal reasoning. Should the final ruling agree with Wednesday’s opinion, it would uphold a 37.6 million pound, or $54.4 million, fine against the British pharmaceutical company levied by London in 2016.

GlaxoSmithKline paid competitors an estimated 50 million pounds, or $65.4 million, to prevent them from manufacturing generic alternatives after its patent on paroxetine, sold under the brand name Paxil in the United States, expired in 1999. Wednesday’s opinion called this deal “an abuse of a dominant position.”

When those agreements ended, the price of the drug fell 70% in the United Kingdom, according to the British government.

“GSK and the generics companies entered into these agreements at the time in order to settle costly, complex and uncertain patent disputes,” GlaxoSmithKline said at the time.

The company also claimed that the so-called pay-for-delay agreements saved the National Health Service, the British public health care provider, 15 million pounds, or $19.8 million.

The case was referred to the Luxembourg-based Court of Justice by the Competition Appeal Tribunal, a special judicial body in the United Kingdom that adjudicates disputes involving competition issues. National courts can refer cases to the Court of Justice when they have questions about the application of EU law on local matters.

GlaxoSmithKline appealed the Competition Appeal Tribunal decision that it violated British anti-competition law and the tribunal referred the case to the EU’s top court.

The pharmaceutical company did not immediately respond Wednesday to a request for comment on the advisory opinion.

The British government claims that anti-competitive drug arrangements cost the NHS millions of pounds a year and has brought a number of such cases before the tribunal to combat the tactic. Last year, for the first time, the government secured a direct payment to the NHS from South African drug company Aspen over a similar pay-for-delay arrangement involving a treatment for Addison’s disease.

A final ruling from the Court of Justice is expected in the coming months.

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