Drugs giant GlaxoSmithKline has been accused by the competition watchdog of paying off firms to delay the launch of cheap versions of its antidepressant treatment in a move that denied the NHS "significant" cost savings.
The Office of Fair Trading (OFT) is alleging that Glaxo offered "substantial" payments to Alpharma, Generics and Norton Healthcare, to hold off from supplying rival medicines to its blockbuster Seroxat treatment.
Glaxo's rivals were attempting to supply a generic paroxetine product in competition to Seroxat, but Glaxo accused each of infringing its patents, and to resolve the disputes they effectively agreed to be paid off, according to the OFT.
The alleged actions by all the firms involved are a potential infringement of competition law, while Glaxo is also accused of abusing its dominant position in the market.
Ann Pope, senior director of services, infrastructure and public markets at the OFT, said: "The introduction of generic medicines can lead to strong competition on price, which can drive savings for the NHS, to the benefit of patients and, ultimately, taxpayers. It is therefore particularly important that the OFT fully investigates concerns that independent generic entry may have been delayed in this case."
The OFT said the firms will now be asked to respond to its allegations before deciding if competition law has been infringed.
Seroxat is one of Glaxo's best-selling medicines, but has been hit by generic competition in recent years, with sales falling 14% in 2012 to £374 million. Sales of the drug fell by nearly a fifth in the final three months of last year alone.
Brentford-based Glaxo has been embroiled in controversy before over its Seroxat treatment, also known as Paxil.
Glaxo was fined three billion US dollars (£2 billion) last summer in the biggest healthcare fraud in US history after it admitted paying medics to prescribe the drug for children although it was not intended for under 18s, while it also pushed its Wellbutrin drug for uses for which it was not approved.
Glaxo denied the allegations and said it acted lawfully. A Glaxo spokesman said: "We very strongly believe that we acted within the law, as the holder of valid patents for paroxetine, in entering the agreements under investigation."