NHS - taking competition to court

Generics UK, part of Merck KgaA, has paid £12 million to the NHS in order to settle the NHS’s claim that it fixed the prices of warfarin, ranitidine and certain penicillin-based antibiotics it supplied to the NHS. Generics UK has not admitted liability but stated that it would provide co-operation with the NHS with respect to continuing claims regarding alleged price-fixing arrangements.

This settlement concerns one of a group of generic drug manufacturers against whom the NHS has brought civil actions to recover damages based on breach of competition law. The NHS brought the first of its claims in 2002 when, expecting the entry of generic drugs to reduce prices, it noticed that prices in fact remained stable or increased. Suspecting that certain generic drug manufacturers may have fixed their prices, the NHS commenced proceedings in the High Court to recover its losses. One manufacturer, Ranbaxy, reached an out of court settlement with the NHS for £4.5 million in April 2005,