NOVARTIS GENERICS UNIT EMBROILED IN UK PRICE-FIXING INQUIRY

According to reports in the UK press, the generics unit of Swiss drug major Novartis is currently under investigation by both anti-fraud agency SFO and healthcare provider the National Health Service (NHS) on alleged price-fixing charges.

The scope of a two-year SFO investigation has reportedly been widened to include generics producer Sandoz, and will consider whether cartel practices have existed among generic drug suppliers. The inquiry into Sandoz refers to the period prior to an unnamed UK Sandoz affiliate's acquisition by Novartis. The SFO raided the local offices of six generics producers in 2002 as part of its ongoing investigations.

Meanwhile, the NHS is conducting an inquiry into prices on more than 30 drugs produced by drugmakers including US-based drugmaker Ivax. The state-run provider is also in the process of suing India's Ranbaxy and others for up to GBP180mn (US$335.49mn) allegedly lost due to inflated pricing. Reports also claim that the generics division of Germany's Merck KgaA is also involved in the lawsuit.

Novartis, for its part, has stated that its subsidiary is cooperating with the SFO's investigation into possible criminal or competition law violations. The company has meanwhile allowed US$51mn to cover costs associated with a US Department of Justice inquiry into its marketing and pricing practices on a number of its medical devices.