Ratiopharm targeted in German Rx scandal

The German generics firm Ratiopharm is at the center of a major investigation into what the state prosecutor's office in Ulm describes as alleged abuse of the drug prescriptions system at the expense of the health funds. Officials have been extending their search of Ratiopharm medical visitors' homes, with both previous and current employees - some 400 in all - being targeted.

The prosecutor's office says there is reason to suspect a number of the company's medical visitors with doctors being offered inducements including cash to prescribe Ratiopharm products. The investigation is being described as one of the biggest ever launched by the authorities into a German drugmaker. The company has said it is concerned that the allegations should be tested and cleared up as quickly as possible and is adamant that it has not committed any offenses. An initial inquiry was launched in November 2006 in relation to high discounts being allegedly offered to pharmacists.

The investigation has come at a bad time for the firm, which is part of the Ulm-based Merckle group. Ratiopharm reacted to initial allegations with a thorough clearout and replacement of managers with new ethical guidelines agreed and made part of company policy. The new head of the company Philipp Merckle has been promoting an ethical trading campaign for months. It is not yet clear what the impact of the recent management changes will be on the firm's operations with key people leaving in the wake of the allegations over marketing methods.