GSK fined for colluding to block sale of generics

GlaxoSmithKline has been fined for colluding with a local drug maker to hinder the generic sale of its anti-emetic Zofran for the past 12 years, antitrust authorities said Sunday.

It is the first time that a multinational drug company has been found to offer financial benefits in return for the withdrawal of a generic drug here, the Fair Trade Commission said.

The FTC said that GSK, the world’s fourth-largest drugmaker, was fined with about 3 billion won ($2.6 million) while 2.1 billion won was imposed on Seoul-based Dong-A Pharmaceutical.

In 1998, Dong-A acquired the use patent of the chemical Ondansetron, developed by GSK, and the cheaper price of its generic Ondaron prompted a lawsuit filed by the multinational company in the year.

In 2002, however, GSK offered an “unprecedented deal,” including the exclusive sales right of Zofran and antiviral Valtrex, on condition that Dong-A would not develop or sell any other anti-emetics, the FTC said.

The antitrust regulator said the “reverse payment” deal has continued until October this year, with the contract details being renewed for 12 years.

“GSK has blocked the development and sale of a generic drug even after its patent right for the chemical expired in January 2005. It is clearly an unfair practice,” said Kim Joon-ha, a FTC official.

“Due to their shady deal, the cheaper generic was withdrawn from the anti-emetic drug market here, while financial burden on patients has been deepened,” he said.

The FTC estimated that GSK may have logged about 16 million won in unfair profits from the collision.

GSK, however, immediately denied the allegation, hinting at an appeal against the decision.

“The deal on the sales of Zofran and Vlatrex had nothing to do with Dong-A’s withdrawal of its generic,” a GSK official said in an interview.

“The contract was signed in 2000 and has expired now. The FTC applies the rule retroactively by force,” said the official.

By Lee Ji-yoon (jylee@heraldcorp.com)