Police investigating a suspected £400m ($576m; €652m) conspiracy to defraud the UK National Health Service raided the offices of six drug companies and executives' homes last week.
In more than a dozen dawn raids at addresses in England, Scotland, and Wales, police officers—with support from Serious Fraud Office lawyers, financial investigators, and forensic computer specialists—seized documents, computer records, and bank statements.
The searches were part of a major investigation by the Serious Fraud Office into allegations of collusion in price fixing in the supply of penicillin based antibiotics and the anticoagulant warfarin to the NHS. The six companies, which account for more than 50% of the supply of generic drugs to the NHS, are Generics UK, Kent Pharmaceuticals, Regent-GM Laboratories, Goldshield Group, Norton Healthcare, and Ranbaxy UK.
The fraud office said no arrests were made and no charges were imminent. A spokeswoman said: “The searches are in connection with a major SFO investigation into a suspected conspiracy to defraud the NHS in relation to prices charged by suppliers for prescribed penicillin based antibiotics and warfarin between 1January 1996 and 31December 2000. The investigation is complex and is therefore expected to continue for some time.”
The case was referred to the Serious Fraud Office by the counter-fraud directorate of the Department of Health, set up in 1998 to fight fraud within and against the NHS. Allegations of corruption in connection with the awarding of contracts for the supply of drugs are also thought to be under investigation. Generic drugs account for around half the medicines used in the NHS, at a cost of about £1.2bn a year—a fifth of the service's drugs bill.
Goldshield, the only one of the companies that is listed on the London stock exchange, saw its shares plunge before trading was suspended, but partly recovered after trading was resumed. The company said it did not believe it had conspired to defraud the NHS or had acted in an improper manner.
A spokesman for Ranbaxy said it had never broken any laws in any country, so had nothing to fear or hide.
A 1999 report from the House of Commons Select Committee on Health said that the market for generic drugs in the United Kingdom was “ripe for manipulation” (BMJ 2000;320:7).