SFO pursues drug firms over price-fixing claims

12 April 2006
More legal news

13 April 2006 | Anusha Bradley

The Serious Fraud Office is bringing criminal proceedings against nine individuals and five pharmaceutical companies, alleging conspiracy to defraud the NHS by fixing the price and supply of drugs. It is the largest-ever investigation for price-fixing in the UK.

Two employees of Kent Pharmaceuticals; two former Norton Healthcare workers; two Goldshield Group employees and one ex-employee from each of Regent-GM Laboratories, Generics UK and Ranbaxy face criminal prosecution. Kent, Norton, Goldshield, Generics, and Ranbaxy also face charges. Regent is not being pursued as it is now in liquidation.

In a separate case, DDSA Pharmaceuticals, Kent and Goldshield face civil prosecution from the DH. Last week, Norton and the DH agreed a £13.5 million settlement. Last year, Ranbaxy and Generics reached settlements.

The Serious Fraud Office claims defendants in the criminal proceedings were involved in a "conspiracy to defraud the pricing and supply" of warfarin, a blood-thinning drug, penicillin-based antibiotics and ranitidine, an ulcer treatment, between 1996 and 2000.

A spokesman for the department's counter fraud unit told SM price-fixing was only suspected in 1999 when officials noticed that the cost of the generic drugs, following the release of the patent, did not fall as expected.

Philip Lewis, SFO assistant director, said allegations of price-fixing are taken very seriously.

He added in a statement: "This important case is likely to have a significant impact upon the business culture of this country."

Jim Gee, counter fraud services director for the DH, warned the remaining defendant firms it planned to "press on" with the civil legal proceedings.

The individuals and representatives of the companies will appear at Bow Street Magistrates Court on 27 April.

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