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Ranbaxy among the five drugmakers facing criminal charges for price-fixing of antibiotics & warfarin

The Indian drug major Ranbaxy is among the five pharmaceutical companies facing criminal charges of conspiracy to defraud the British National Health Service, for fixing prices of generic penicillin-based antibiotics and and blood-clotting drug warfarin.

April 10, 2006

Apart from the British arm of Ranbaxy in India, other four drug companies are Kent Pharmaceuticals, Norton Healthcare (now a unit of Teva Pharmaceuticals), Generics U.K., and Goldshield Group. Nine executives were also accused of fixing prices and sharing market information.

The probe began in April 2002 after allegations that British generic drug providers had colluded to set prices from 1996 to 2000. Suppliers of generic penicillin-based antibiotics and warfarin, an anticoagulant, were the focus of the inquiry.

The criminal charges focus on conspiracy to defraud because price-fixing was not a criminal offense until 2002, when Britain passed a law making it illegal. Some of the companies facing charges have already paid more than £10 million (about $17 million) to settle charges with the Department of Health, without admitting any liability.

However, Ranbaxy said that it had not yet seen the allegations.Norton Healthcare said it believed that sales of warfarin and antibiotics during the time covered by the investigation were in compliance with existing laws. Goldshield said it and its executives had not acted in an unlawful or improper way. Generics, which is owned by Merck of Germany, and Kent Pharmaceuticals had no comment.

"This important case involving an allegation of dishonest price fixing by companies is likely to have a significant impact upon the business culture of this country," said Philip Lewis, an assistant director with the Serious Fraud Office, according to a press release.

The fraud agency is under pressure to make sure the investigation bears fruit. The unit is often referred to as the "Serious Farce Office" by the satirical weekly magazine Private Eye, in part because of a history of failing to win convictions. It could be in danger of losing some major investigations to a new organized crime agency begun this month that is modeled on the Federal Bureau of Investigation.

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