On June 22, 2007, the UK Department of Health (DOH) and Goldshield Group Plc, Goldshield Pharmaceuticals Ltd and Forley Generics Limited (Goldshield) issued a joint announcement of the settlement of the UK National Health Service (NHS) price-fixing claims against Goldshield in respect of generic drugs supplied to the NHS. Goldshield has agreed to pay £4 million and to cooperate with ongoing civil proceedings, without admitting any liability.
Between 2002 and 2004, the UK Secretary of State for Health, the Prescription Pricing Authority, and 28 English Strategic Health Authorities brought civil proceedings in front of the High Court against a number of pharmaceutical companies supplying generic drugs to the NHS.
These settlements do not affect the UK Serious Fraud Office (SFO) parallel proceedings against Goldshield and other pharmaceutical suppliers in respect of the supply of Warfarin, the branded drug Marevan, and penicillin antibiotics (amoxicillin, ampicillin, flucloxacillin, phenoxymethylpenicillin). The SFO investigation is based on the common law criminal offense of conspiracy to defraud. At the time of the alleged offenses (January 1996 to December 2000), there was no criminal price-fixing statute. Today criminal proceedings would be brought under the Enterprise Act 2002 (EA 2002), which introduced a criminal offence for cartel activities.
The SFO initiated criminal proceedings on April 5, 2006, by issuing summons against Kent Pharmaceuticals Limited, Norton, Generics UK Limited, Ranbaxy UK Limited, and Goldshield. In addition, nine individuals from these companies, plus one individual from a company in liquidation at that time (Regent-GM Laboratories Limited), were charged. The trial is scheduled to begin on January 21, 2008, at Southwark Crown Court, London. A preparatory hearing will take place on October 22, 2007.
An increasing number of criminal proceedings for cartel activities are expected to be initiated by the UK Office of Fair Trading (OFT), with assistance from the SFO. The OFT has started to make use of its “new” EA 2002 powers by initiating a number of criminal investigations. On May 3, 2007, it announced that it had launched criminal investigations into alleged bid rigging, price-fixing, and market allocation in respect of marine hoses used to transfer oil, and for the first time carried out home searches of individuals as part of its investigation. On June 22, 2006, the OFT confirmed that it was conducting a criminal (EA 2002) and civil (Competition Act 1998; Article 81 EC Treaty) investigation into alleged price coordination of fuel surcharges between airlines for long haul passenger flights to and from the UK. On August 1, 2007, as part of the OFT's announcement that British Airways is to pay a £121.5 million penalty (which will enable the OFT to close its civil investigation), the OFT explained that it is continuing its criminal investigation into whether any individuals dishonestly fixed fuel surcharge levels, contrary to EA 2002.