Fraud Office launches action over drug prices

Tim Moynihan,Pa
Wednesday 05 April 2006 03:34 EDT
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The Serious Fraud Office today began criminal proceedings against nine individuals and five companies alleging conspiracy to defraud in relation to the pricing and supply of warfarin and other drugs.

It said the allegations concerned pricing and supply of warfarin, the branded drug Marevan and penicillin-based antibiotics between January 1996 and December 2000.

The proceedings followed an investigation into alleged price-fixing and market- sharing by suppliers of generic drugs, specifically warfarin and penicillin-based antibiotics (amoxicillin, ampicillin, flucloxacillin, phenoxymethylpenicillin).

The SFO said the nine people who would be charged when they surrendered their bail over the next three days were: Denis O'Neill and John Clark, both of Kent Pharmaceuticals Limited; Jonathan Close and Nicholas Foster, both formerly of

Norton Healthcare Limited; Luma Auchi, formerly of Regent-GM Laboratories Limited (now in liquidation); Michael Sparrow, formerly of Generics (UK) Limited; Anil Sharma, formerly of Ranbaxy (UK) Limited; and Ajit Patel and Kirti Patel, both of Goldshield Group plc.

Summonses issued by Bow Street magistrates on Monday were also being served today on five companies - Kent Pharmaceuticals Limited; Norton Healthcare Limited; Generics (UK) Limited; Ranbaxy (UK) Limited and Goldshield Group plc (formerly Goldshield Pharmaceuticals (Europe) Limited).

The individuals would be bailed following charge to attend Bow Street Magistrates' Court on April 27 when the companies were also required to be represented.

The case controller, assistant director Philip Lewis, said: "This important case involving an allegation of dishonest price-fixing by companies is likely to have a significant impact upon the business culture of this country."

Goldshield Group issued a statement on Friday in which it said two of its directors - Ajit Patel and Kirti Patel - had been told they would be charged on April 7 in relation to an alleged conspiracy to defraud the Secretary of State for Health and others in relation to warfarin and Marevan.

"Goldshield and both directors continue to maintain that they did not act in a way that was unlawful or improper," it said.

The SFO has been investigating allegations of a drugs cartel set up to swindle the NHS for a number of years.

As long ago as April 2002, police raided six drug companies as part of a probe into an alleged multimillion-pound scam.

The investigation centres on suspected collusion by companies on price-fixing in the supply of penicillin-based antibiotics and the blood-thinning drug warfarin, used to treat stroke victims.

The case was referred to the Fraud Office after initial inquiries carried out by the counter fraud directorate of the Department of Health.

The Department has been suing over alleged agreements between companies to restrict the supply of warfarin and to fix its price.

Three companies have since offered multimillion-pound, no-liability compensation deals to the NHS over the issue, totalling about £30 million.

Civil claims were made in connection with the alleged price-fixing of drugs delivered to Britain's 28 Strategic Health Authorities between 1996 and 2000.

All the firms involved have denied any wrongdoing.

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