In the Media

Criminal charges brought for overcharging the NHS

PUBLISHED April 6, 2006

The Serious Fraud Office is bringing criminal charges against a group of drugs manufacturers accused of overcharging the National Health Service by millions of pounds.

Goldshield, which is publicly listed in Britain, and four other companies with operations in this country, were told yesterday that they would be charged over allegations that they acted as a cartel, ramping up the cost to the NHS for the blood-thinning drug warfarin and penicillin-based antibiotics between January 1996 and December 2000. The SFO also said that it will bring criminal charges against nine people.

They include Ajit Patel and Kirti Patel, chairman and chief operating officer of Croydon-based Goldshield, who alerted the stock market last week that they had been told about the SFO's intention to bring charges against them.

The charges follow a four-year SFO investigation.

The drugs involved were used by millions of people and the NHS claims that it lost more than ?150m on their purchase.

The other directors being charged are Denis O'Neill and John Clark of Kent Pharmaceuticals, Jonathan Close and Nicholas Foster, formerly of Norton Healthcare, Luma Auchi, formerly of Regent-GM Laboratories, Michael Sparrow, formerly of Generics UK and Anil Sharma, formerly of Ranbaxy.

The directors, who will be charged and bailed over the next two days, face a maximum of 10 years in prison if convicted. They will attend Bow Street magistrates' court in London on April 27.

The companies facing a criminal case are the UK arm of Ranbaxy, India's largest pharmaceuticals company, Generics UK, Kent Pharmaceuticals and Norton Healthcare, as well as Goldshield.

Three of the companies have agreed multi-million pound civil settlements with the NHS. Norton Healthcare, together with Norton Pharmaceuticals, said on Tuesday that it had agreed to pay ?13.5m and provide "co-operation in connection with the continuing claims regarding the alleged price-fixing arrangements", although there is no admission of liability on the company's part.

The Norton settlement follows a ?12m compensation package agreed with Generics UK, which is part of the German Merck drugs group, and a ?4.5m deal with Ranbaxy.

The companies agreed to co-operate with civil claims brought by the Department of Health against a group of eight generic drug manufacturers, but without any admissions of liability.