Drugs firm takes SFO to court

THE Serious Fraud Office is facing a legal challenge to its probe into an alleged £400m drugs company price-fixing scam from one of the companies it is investigating.

The SFO passed on thousands of documents seized from Kent Pharmaceuticals to the Department of Health during raids last year, as part of an investigation into whether several firms cheated the National Health Service by overcharging for their products.

The probe has sparked a High Court claim, being heard this week, by Kent that the transfer of company papers between Government departments was illegal. A ruling is expected soon. Court papers show the SFO seized 6,000 documents in raids lasting 34 hours on Kent's offices and the homes of its executives.

The company claims that the SFO then secretly disclosed some of the papers to the Department of Health. Kent argues that in doing so, it acted illegally and was in breach of European Human Rights legislation. The SFO, headed by Robert Wardle, says it will continue to pursue its probe whatever the outcome of the action.

Other drugs companies being investigatedare watching the latest developments closely. They include Goldshield, Regent-GM, Norton Healthcare (now called Ivax) and Ranbaxy UK. The probe could be an embarrassment to the Government as Ivax deputy chief executive Isaac Kaye is a Labour donor.

The SFO was seeking evidence that legal copycat drugs, mainly warfarin and penicillin-based products, had been subject to a series of illegal price rises.

The Department of Health issued a civil claim against Goldshield, Norton and Regent last December, seeking £29m in damages for alleged overcharging for warfarin, used for heart problems.

The SFO alleged in the High Court that the raids were prompted because 'between 1996 and 2000 a number of persons within the pharmaceutical industry acted dishonestly to increase the price of certain generic drugs, and, in particular, warfarin and penicillin based antibiotics'.

It also said that generic drug prices increased by 700% between June 1998 and December 1999.