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NHS takes makers of generic drugs to court for price fixing
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     The NHS is seeking over ?00m ($183m; €150m) in compensation from two manufacturers of generic drugs that allegedly formed a cartel to fix artificially high prices for ranitidine, the generic form of the ulcer drug Zantac.

    The case is the latest to emerge from an ongoing investigation by the NHS Counter Fraud and Security Management Service into anticompetitive behaviour in the generic drug industry. Jim Gee, chief executive of the service, said the overcharging for ranitidine was the most serious example yet uncovered and may have deprived the NHS of up to ?10m.

    "All the civil claims we have brought will be vigorously pursued to secure the maximum possible recovery for the NHS either by judgment and damages or earlier agreement with the defendant companies," said Mr Gee. "My organisation’s investigations regarding the anticompetitive supply of over 30 other generic drugs continue."

    The claim, the biggest of its kind in British legal history, was lodged with the High Court by the secretary of state for health, the Prescription Pricing Authority, and the 28 English strategic health authorities, against Generics UK Limited (a subsidiary of the German pharmaceutical giant Merck) and Ranbaxy UK (the British division of the Indian generic drug manufacturer Ranbaxy).

    Both companies were also named in a similar claim launched last December, which sought ?0m from seven manufacturers over alleged price fixing of penicillin based antibiotics. Another claim lodged in 2002 accused seven generic drug companies of operating a cartel to drive up the price of warfarin. None of these claims have yet come to court.

    The Serious Fraud Office is conducting a parallel criminal investigation into the same allegations, but no charges have yet been laid.

    Ranbaxy UK’s parent company in New Delhi issued the following statement: "The details of the claim are most unclear. Damages are not quantified. The Department of Health has indicated that it is not in a position to set out its case in any detail or to serve its claim so as to commence its proceedings against Ranbaxy (UK) Ltd. In the circumstances, it is not possible for Ranbaxy to comment at this stage. The company is not aware of any wrongdoing and will defend vigorously legal proceedings, if served."

    A spokesperson for Merck, said the court papers had been received but they contained no details of the allegations. Papers filed with the court so far refer only to "arrangements between the defendants adversely affecting competition in the sale and supply of ranitidine in the UK between 1997 and 2000."

    More detailed papers have been filed in the penicillin claim. Those documents allege that companies consulted each other before offering excuses for stock shortages, and imposed a system of penalties on manufacturers who exceeded secret production quotas.(London Owen Dyer)