CAT rejects appeal by GSK and others against “pay for delay” infringement

CAT rejects appeal by GSK and others against “pay for delay” infringement

In 2016, GlaxoSmithKline (“GSK”), Alpharma Limited and Generics (UK) Limited (“GUK”) were fined by the CMA for entering into “pay for delay” agreements under which Alpharma and GUK delayed a generic form of the drug paroxetine coming on to the market in return for payments from GSK.

The CMA found that the agreements infringed competition law and that GSK had abused its dominant position.

GSK, Alpharma and GUK appealed to the Competition Appeal Tribunal (“CAT”), which dismissed certain grounds of the appeal but referred others to the Court of Justice of the European Union (CJEU). The CJEU issued its judgment in January 2020, in which it confirmed that the type of “pay-for-delay” agreement at issue in this case can have the object of restricting competition and may constitute an abuse of dominant position.

The CAT has now published its Supplementary Judgment on the appeal case brought by GSK and others, taking into account the CJEU’s responses to its questions. In this judgment, the CAT has rejected all of the grounds of appeal put forward by the appellants. In particular, it found that GUK and Alpharma were potential competitors of GSK in the supply of paroxetine in the UK and that the agreements that they entered into had both the object and effect of restricting competition.

The CAT’s full judgment is here.

The Department of Health and Social Care will now be able to seek follow-on damages in the courts.

Rachel Webster acted as one of the economic experts for the CMA during the CAT appeal.  

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