BRUSSELS (Reuters) - The European Union’s top court set criteria on Thursday to resolve a dispute in Britain over deals GlaxoSmithKline (GSK.L) struck with rival drugmakers to delay the launch of generic drugs.
The court said these deals in themselves do not constitute a breach of competition rules but their impact needed to be assessed because they could harm competition.
The case was brought before the court by GSK after Britain’s competition watchdog fined the drugmaker 37.6 million pounds ($49 million) in 2016 for its so-called “pay-for-delay” deals that postponed the launch of cheaper copies of an anti-depressant.
“It is necessary to determine how the market will probably operate and be structured in the absence of the concerted practice,” the court said in its assessment of the potential harm to competition caused by such deals.
The British Competition and Markets Authority (CMA) had said that between 2001 and 2004 GSK paid generic drug companies over 50 million pounds with the intention of delaying the release of cheap generic versions of its former blockbuster Seroxat after its patent expired in 1999.
The CMA welcomed the ruling on Thursday, saying it clarified a number of questions which would help competition authorities, including itself, in their work.
Following the decision, the case will now go back to the Competition Appeal Tribunal for a final judgment on the companies' appeals, it said here
The EU court said on Thursday that the ability of each generic manufacturer to access the market had to be assessed in deciding whether the deals were unlawful.
If generic drugmakers were not in a position to sell their cheaper copy of Seroxat there would have been no harm to competition, the court concluded, effectively leaving a British appeal tribunal to settle the dispute.
“We do not yet have the final ruling in this case, which relates to agreements from nearly 20 years ago, and so will not be commenting further while proceedings are ongoing,” a spokesman for GSK said in a statement.
Reporting by Francesco Guarascio; Additional reporting by Alistair Smout in London and Pushkala Aripaka in Bengaluru; editing by Andrew Cawthorne and Jason Neely