Top EU Court Backs UK On GlaxoSmithKline “Pay-For-Delay” Fine

Europe’s top court has backed the UK competition regulator’s decision to fine GlaxoSmithKline (GSK) for entering financial deals with rivals to delay the introduction of generic versions of one of its drugs, reported The Financial Times. 

While the so-called “pay-for-delay” transactions did not necessarily constitute “barriers” to competition per se, they could be deemed anti-competitive if they prevented consumers from future benefits including price reductions, the European Court of Justice announced on Thursday, January 30. 

It was necessary to assess “how the market will probably operate and be structured in the absence of the concerted practice,” the court stated on Thursday. 

EU officials briefing on the ruling said the ruling empowered the UK’s Competition and Markets Authority to take a tougher stance against “pay-for-delay” deals.  

The Competition and Markets Authority (CMA) ruled in 2016 that the deals struck by GSK were anti-competitive and fined the drugmaker £37.6 million (US$49.7 million). It found that the pay-for-delay deals had deprived the National Health Service of significant price reductions, after the average price of a GSK drug dropped by 70% over two years after independent generics were introduced to the market. 

GSK and the implicated generics manufacturers challenged the British regulator’s decision at the Competition Appeal Tribunal, which sought guidance from the European court. 

The ECJ’s ruling only clarifies the issue of the criteria to be applied by the CMA to hand out any fines. Ultimately, any judgment still needs to be ratified by the UK’s Competition Appeals Tribunal.

Full Content: Financial Times

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