PHARMA giant GlaxoSmithKline (GSK) lost an appeal today against a £37 million fine for paying off potential rivals to prevent them from competing against its “blockbuster” antidepressant.

GSK paid three other pharmaceutical companies more than £50m between 2001 and 2004 to delay the launch of cheaper generic versions of paroxetine, which it sold under the brand name Seroxat.

The firm made more than £130m from Seroxat in 2001 and 2002 alone, at which point Seroxat was the biggest-selling drug across the entire GSK group.

Paroxetine prices fell by 69 per cent, from £12.95 to £3.97 a pack, within a year of generic entry to the market in December 2003.

The Competition and Markets Authority found the illegal “pay-for-delay” agreements made the companies “significant financial gains … at the expense of the NHS.”

GSK and the others appealed against the fine, but specialist body the Competition Appeal Tribunal (CAT) found that the agreements were “inherently harmful to competition” and not covered by legal exemptions.

The CAT also referred several points of law to European Union courts for a preliminary ruling.

A CMA spokeswoman said: “We consider that the companies broke the law by delaying the threat to GSK of competition from generic companies, in return for substantial cash and non-cash payments.

“Such conduct can deprive the NHS of significant cost savings.”

Seroxat has been the subject of controversy since a 2002 BBC Panorama exposé found that GSK had withheld results from two clinical trials in 1998, both of which found that the drug was not effective against depression in children.

An internal GSK document from October 1998 said it would be “commercially unacceptable” to publicise the results as this would “undermine the profile of paroxetine.” Some 32,000 children were prescribed Seroxat in 1999.

Seroxat is also the subject of a decade-long High Court damages claim by more than 100 patients who were prescribed the drug. They say its withdrawal symptoms are significantly worse than those of other antidepressants.

Despite settling similar claims in 2005 with more than 3,000 people in the US, where it is called Paxil, GSK has spent nearly £7m fighting the British litigation, which it is hoped will reach trial this year.