Financial Daily from THE HINDU group of publications
Saturday, Apr 02, 2005
Financial Daily from THE HINDU group of publications Saturday, Apr 02, 2005 |
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Announcements Drug pricing issue: Ranbaxy to pay £4.5 m to UK health service Our Bureau
New Delhi , April 1 RANBAXY (UK) Ltd, the wholly owned subsidiary of Ranbaxy Laboratories Ltd, has agreed to pay UK's National Health Service (NHS) £4.5 million (about Rs 37 crore) for settlement of claims brought against it for allegedly fixing high drug prices of antibiotic - penicillin and ulcer drug, ranitidine during 1996-2000. A joint statement issued by Ranbaxy (UK) Ltd and the Department of Health, said, "Under the terms of the settlement, Ranbaxy has agreed, on a full and final basis and without admission of liability, to compensate the NHS by payment of £4.5 million and to provide co-operation in the context of the ongoing proceedings." The NHS had sued some generic companies for alleged anti-competitive cartel conduct in connection with the supply of generic drugs. It had said that prices did not fall fast enough when generic competition was introduced in the late 1990s. Last year, it had alleged that Ranbaxy and Generics UK, part of Merck, had indulged in price fixing of ranitidine, which is not patent protected. In December 2003, it had launched a civil action against seven other pharmaceutical companies, including Generics UK and Ranbaxy for alleged price-fixing of penicillin. A £30-million lawsuit was filed against these companies. Prior to this, a £28-million legal suit was also filed against six companies, including Norton Healthcare Ltd, Regent- Gm Laboratories, Goldshield Group Plc and Forley Generics Ltd on unfair pricing practice of a blood-thinning agent, Warfarin. The Ranbaxy spokesperson here said, "The settlement was reached as the NHS has been one of the largest customers and the local management in UK was not in favour of a protracted legal battle. After this mutual settlement, we hope to continue supplying drugs to the NHS." The cumulative sales of Ranbaxy in UK, for all products during 1997 to 2000 amounted to £35 million. According to analysts tracking the sector, "This could have some impact on the cash of the company. Also, it could have a negative bearing on the image of the company. However, through the mutual settlement, the company seems to be trying to make good its loss quickly." In line with the overall rise in the Sensex, the company's stock rose by 0.64 per cent to close at Rs 1,010.30 on the Bombay Stock Exchange.
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