Ranbaxy pays Rs 36 cr to end price row in UK

Claims settled against Ranbaxy for alleged anti-competitive cartel conduct.

Ranbaxy UK Ltd, the British subsidiary of Ranbaxy Laboratories Ltd, will pay the National Health Service (NHS) of the UK £4.5 million (Rs 36.5 crore) in settlement of charges of overpricing of generic medicine (ranitidine and penicillin).

"The Department of Health and Ranbaxy (UK) Ltd are pleased to jointly announce settlement of the claims brought against Ranbaxy for alleged anti-competitive cartel conduct in connection with the supply to the NHS of generic drugs between 1996 and 2000," the two parties said in a joint announcement issued today.

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. In return, NHS will drop the charges against Ranbaxy.

"We hope to do more business with NHS now," a Ranbaxy executive said. "Both Ranbaxy and the Department of Health look forward to a strong working relationship in the future and are committed to the highest standards of health care at all levels," the statement added.

In June last year, the NHS had sought compensation of at least £100 million from Ranbaxy UK Ltd and Generics UK Ltd, a subsidiary of Merck of Germany, for overcharging for the supply of ranitidine, an anti-ulcer drug, from 1997 to 2000.

Though this was the largest such claim made by the NHS, it did not specify the claims against each company.

In December 2003, the NHS had brought about similar proceedings against seven companies, including Ranbaxy UK Ltd, for overcharging for the supply of penicillin.

In its paper submitted to the high court, the NHS had said these companies had curtailed the supply of the drug to it.

Ranbaxy UK Ltd was set up in 1996 as a part of the company's strategy to tap the key generics markets of the world.