Glaxo Settles Over Delayed Generics

The maker of the antidepressant Paxil has agreed to pay $14 million to states to settle allegations that it blocked generic versions of the drug from being made, forcing the states to pay higher prices.

London-based GlaxoSmithKline denied any wrongdoing and was not admitting liability in making the settlement.

“We made the decision that settling was appropriate to avoid the expense and distraction of protracted litigation,” company spokeswoman Gaile Renegar said. The settlement includes $2 million to California, Atty. Gen. Bill Lockyer said in a statement Tuesday.

The states had alleged that Glaxo used frivolous patent-infringement lawsuits against generic drug makers, triggering automatic extensions of the patent for Paxil. That delayed the introduction of generic versions of the drug, resulting in higher prices for Medicaid programs and the general public, said the attorneys general who won the settlement, which was filed Tuesday in federal court in Philadelphia.

The settlement is primarily for purchases made by Medicaid, the health insurance program for the poor that is funded by states and the federal government. States also will receive money for other purchases for indigent care.

Glaxo “used the courts to hold onto a monopoly for a popular drug, and the end result was that consumers, including Medicaid, paid more than they should have,” Missouri Atty. Gen. Jay Nixon said in a statement. “This settlement demonstrates that we won’t allow pharmaceutical companies to be rewarded for actions that penalize consumers.”