UK DRUG FIRMS FACE TRIAL OVER FRAUD ALLEGATIONS

Six generics manufacturers are to face trial over official allegations of a GBP100mn (US$182.22mn) price-fixing fraud involving UK healthcare provider the National Health Service (NHS).

The trial would be the culmination of a three-year investigation by Britain's Serious Fraud Office (SFO). According to local media reports, evidence includes material from boardroom meetings on an alleged agreement to fix prices on commonly-prescribed drugs and pool the resulting profits. Sixteen company insiders have provided the claims under a controversial new "witness accomplice" programme.

The SFO's case centres on claims that the companies accused were engaged in "cartel" behaviour between 1996 and 2001. The drugs involved included penicillin-based antibiotics, which generate 20mn prescriptions annually, and the blood thinner warfarin, which has 5mn prescriptions per year.

Two other companies -- a local unit of German drugmaker Merck KGaA and a subsidiary of Indian generics firm Ranbaxy -- have already settled, agreeing to pay compensation with no admission of guilt. Meanwhile, it has been suggested that the generics firms still involved in the proceedings could face damages of up to GBP150mn (US$261.65mn), and any executives found guilty could face up to 10 years in prison.

The NHS has now completed its parallel investigations. The state-run healthcare behemoth recently hailed anti-fraud measures that have purportedly saved UK taxpayers some GBP675mn (US$1.19bn) since 1998.