A prosecution brought by the Serious Fraud Office (“SFO”) alleging that a number of pharmaceutical companies had conspired to defraud the NHS of £120m by fixing the prices of various drugs has been abandoned after the Court of Appeal refused the SFO permission to appeal.

Those charged with the offences included Goldshield, Kent Pharmaceuticals Ltd, Norton Healthcare Ltd, Generics (UK) Ltd and Ranbaxy (UK) Ltd. The charges related to alleged price fixing cartels concerning the supply of the commonly prescribed drug warfarin and penicillin-based antibiotics on the NHS.

The prosecution, which resulted from the SFO’s investigation codenamed Operation Holbein, was originally halted in July 2008 by the High Court after the House of Lords held in a separate case in March 2008 that cartels could not be prosecuted on a common law charge of conspiracy to defraud unless there were aggravating factors and “mere price fixing” without any aggravating conduct was not an offence until the Enterprise Act 2002 made it so. The alleged offences occurred between 1996 and 2001 and so pre-dated the Act.

The SFO was ordered to pay costs. It is thought that Operation Holbein may have cost as much as £40m over the course of its 6 year duration.