Goldshield settles £1m 'price-fixing' claim
Thursday 06 March 2008
The drug company Goldshield, which is accused of fixing the price of medicines supplied to the NHS, has agreed to pay £1m to settle claims brought by the health authorities of Northern Ireland and Scotland.
Without admission of liability and on a "full and final basis", Goldshield yesterday agreed to pay £250,000 to the Department of Health and Social Services of Northern Ireland, a day after settling its claim with the Scottish authorities for £750,000.
The move comes eight months after the company paid the NHS £4m to settle its claims relating to the price-fixing of generic medicine bringing the total paid out by the company to £5m.
The civil claims accused a number of drug companies of operating a cartel and colluding to fix the price of warfarin, a blood-thinning drug.
Keith Hellawell, chairman of Goldshield, said he was pleased to have reached a settlement with the different authorities. "We recognise the importance of building strong working relationships with our customers," he said.
The Scottish Health Secretary Nicola Sturgeon said: "I am delighted we have managed to reach a settlement agreement with Goldshield. This is a satisfactory conclusion to our negotiations."
Shares in the company rose 4.5p yesterday to 274p.
The Serious Fraud Office (SFO) is continuing with its criminal investigation relating to allegations concerning warfarin and penicillin-based antibiotics supplied to the NHS between January 1996 and December 2000. As part of an inquiry into the alleged multimillion-pound scam, police raided six drug companies in 2002.
The company's former chief executive and co-founder, Ajit Patel, and Kirti Patel, chief operating officer, resigned from the company last summer to focus on the criminal case and former finance director Rakesh Patel became chief executive.
At the time of the company's interim results in September, Dr Hellawell said Goldshield remained in positive dialogue with the SFO. If the case were to end in a trial, Goldshield could face a fine of £5m to £6m if found guilty, according to analysts.
The group reported half-year pre-tax profit of £6.1m in September compared with losses of £3.6m the same period the previous year. The company has changed its strategy to focus on its core pharmaceutical and healthcare business after agreeing to sell off its India business.
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