UK fraud investigation over drugs price-fixing

Criminal proceedings have begun in the UK against five generic drug manufacturers, over allegations that they defrauded the National Health Service out of millions of pounds, by price-fixing in the supply of the warfarin, ranitidine and certain antibiotics. Three of the companies have agreed to settle with the NHS, making payments totalling L30.0 million ($52.1 million).

The companies being charged are all UK-based: Kent Pharmaceuticals, Norton Healthcare, Generics (UK) Ltd (a subsidiary of German drugmaker Merck KGaA), Ranbaxy (UK) Ltd (a subsidiary of India's major generic producer Ranbaxy Laboratories) and the Goldshield Group. In addition, nine individuals have been charged, all of them former employees of the companies concerned, as well as a sixth, Regent-GM Laboratories Ltd.

Three of the companies charged are members of the British Generic Manufacturers' Association. Most of the firms contacted by the Marketletter did not wish to comment at this time, although a Merck spokesman confirmed that Michael Sparrow, one of the nine individuals charged, was "no longer with the company," and a spokesman for Ranbaxy also confirmed that Anil Sharma, another accused person, had left the firm.