NHS sues drug firms 'for £100m'

Counter fraud experts say the cost of the drug should have fallen

The NHS is seeking at least £100m compensation from two drug companies who it alleges "fixed" the price of an ulcer drug in the late 1990s.

The NHS's Counter Fraud Service has issued proceedings in the High Court against Generics UK Ltd and Ranbaxy.

The allegations relate to the sale and supply of ranitidine between 1997 and 2000.

The CFS is currently investigating similar concerns in regard to around 30 other drugs.

We would not be taking this action unless we were very confident of the case we are putting forward Jim Gee, NHS Counter Fraud Service

Ranitidine is a generic drug which was commonly prescribed for the treatment of gastric and duodenal ulcers.

It came onto the market when the patents for the branded drug Zantac expired.

As in any case where a drug comes off patent, the NHS expected its price to fall, but this did not happen with ranitidine.

The investigation into why this failed to happen has led to the High Court action against Generics, a subsidiary of the German pharmaceutical company Merck, and the British arm of the Indian company Ranbaxy.

The CFS estimates that the NHS could have lost out on at least £100m, and possibly as much as £110m.

Investigation

Jim Gee, chief executive of the service, said: "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 late 1990s,

"The evidence that has been uncovered is that it lasted up to 2000."

A spokesman for Ranbaxy told BBC News Online: "The company is not aware of any wrongdoing and will defend vigorously legal proceedings."

However, he said he could make any further comment .

Generics UK Ltd said it did not want to comment.

Mr Gee said the CFS was looking at the position in respect of 30 other drugs.

It is currently examining documents seized from drug companies by the Serious Fraud Squad to decide if other action needs to be taken.

It has already said it will sue seven companies over the sale of common medicines including warfarin and penicillin-based drugs.

Mr Gee said: "Whatever we find, we will act on."