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Glaxo slapped with ₤37.6M fine for years-old pay-for-delay deal

Feb. 12, 2016 12:25 PM ETGSK plc (GSK) StockGSK, AGN, MKGAY, MKGAF, VTRSBy: Douglas W. House, SA News Editor
  • In its first pay-for-delay decision, the U.K.'s Competition and Markets Authority (CMA) dings GlaxoSmithKline (GSK +0.7%) for ₤37.6M ($54.4M) for its activities to delay generic competition to its antidepressant Seroxat (paroxetine) during the period 2001 - 2004.
  • According to the Authority, the company paid more than ₤50M to certain firms to delay the launch of their versions, thereby depriving the National Health Service of significantly better pricing. When generics finally hit the market at the end of 2003, prices were 70% below branded Seroxat.
  • Despite claims that it did nothing wrong, the company has agreed to the settlement in order to avoid costly litigation.
  • The CMA also fined Generics UK (now part of Mylan (MYL -1%)) and its former parent Merck KGaA (OTCPK:MKGAF)(OTCPK:MKGAY) ₤5.8M and Actavis (AGN +0.1%) ₤1.5M as the successor to Alpharma.

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