UK, DRUGMAKERS SETTLE IN GENERICS PRICE-FIXING PROBE

According to reports in the UK media, Germany's Merck KGaA has now joined Indian generics major Ranbaxy in opting to settle claims relating to a government investigation into alleged price-fixing for generics supplied to the UK's National Health Service (NHS). Ranbaxy settled earlier in the year, reportedly paying GBP4.5mn (US$7.85mn) to the authorities with no admission of responsibility. However, a number of other companies are reported to remain the subject of inquiries by criminal enforcement agencies.

The reports follow news in May that the UK's Serious Fraud Office (SFO) was in the process of a long-running investigation into generics pricing. Meanwhile, the Department of Health is now also understood to have sought GBP150mn (US$261.65mn) in damages from all the major suppliers allegedly involved, which purportedly inflated prices for warfarin, some penicillin-based antibiotics and a generic version of the ulcer treatment Zantac.

The pricing of a further 30 drugs is also being examined by NHS fraud investigators, and could include atenolol, thyroxine and two hypertension drugs. However, the SFO probe is to confine its investigation to warfarin and penicillin manufactured between 1996 and 2001.

A number of company offices and homes were raided in April by the SFO in relation to the cases; nevertheless, legal sources claim that pricing fixing of this type has only been technically illicit in England since 2002. While this could represent a threat to the success of the SFO investigation, NHS anti-fraud units are reported to have saved the service GBP670mn (US$1.69bn) since their inception, along the lines of successful prosecutions of this type in the US. The UK's generics market was estimated at US$5.4bn in 2004.