Britain accuses Ranbaxy of price-fixing

Thursday, 24 June 2004, 07:00 Hrs
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LONDON: India's drug major Ranbaxy is one of the two companies accused by Britain's National Health Service (NHS) of fixing prices of drugs.

The NHS is seeking compensation from the company for after the discovery of an alleged price-fixing cartel that ran from 1997 to 2000.

Reports say that the NHS has applied to the high court to recover at least 100 million pounds, which it says was lost to the NHS through overcharging by the two companies for the supply of the ulcer drug ranitidine.

The action, in the name of John Reid, the health secretary, and 28 strategic health authorities in England, has been taken against Generics UK Ltd, a subsidiary of the German pharmaceutical giant Merck, and Ranbaxy UK Ltd, the British arm of the Indian generic drug manufacturer Ranbaxy.

Jim Gee, chief executive of the NHS's counter-fraud service, said the overcharging was the most serious case so far of unlawful price-fixing by a pharmaceutical cartel.

It deprived the NHS of "at least 100 million pounds, and probably 110 million".

Gee told reporters: "We would not be taking this action unless we were very confident of the case we are putting forward. Unless we protect the NHS's resources, the NHS will not be able to protect the public's health in the way it should.

"We believe unlawful behaviour took place in the middle to late 1990s. The evidence that has been uncovered is that it lasted up to 2000, but we are looking at the position in respect of 30 other drugs. Whatever we find, we will act on."

The Guardian reported that ranitidine was a generic drug that was commonly prescribed for the treatment of gastric and duodenal ulcers. It came on to the market when patents for the branded drug Zantac expired. The NHS expected the prices to fall fast when generic drugs became available, but this did not happen with ranitidine.

Papers submitted by the counter-fraud service to the court Tuesday said Reid and the health authorities would claim "for damages and interest to compensate them for loss caused to them by arrangements between the defendants adversely affecting competition in the sale and supply of ranitidine in the UK between 1997 and 2000".

In December 2002, the NHS launched a similar civil action against six other pharmaceutical companies for alleged price-fixing of the drug warfarin.

In December last year it also brought proceedings against an alleged cartel of seven firms, including Generics UK and Ranbaxy UK, for keeping up the price of penicillin.

In each case it relied on information it requested from the Serious Fraud Office, which raided the homes and offices of senior drug company executives during Easter 2002.

Source: IANS
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