Goldshield seeking to settle claims of NHS drug cartel

Goldshield, the Croydon-based vitamins and pharmaceuticals distributor, has made overtures to settle its legal battle with the Department of Health, which is accusing the company of colluding with other drug suppliers to defraud the National Health Service.

Goldshield, the Croydon-based vitamins and pharmaceuticals distributor, has made overtures to settle its legal battle with the Department of Health, which is accusing the company of colluding with other drug suppliers to defraud the National Health Service.

The company's legal advisers are understood to have signalled their intention to reach an agreement.

The size of any settlement is far from clear, however, and an agreement is several months off. The company insists it has done nothing wrong, but the legal dispute is tying up management at a time when Goldshield is trying to pick itself up from a series of profit warnings.

There was no update on the lawsuit when Goldshield presented its annual results to the City. These showed sales plunging 17 per cent in the year to March and pre-tax profits dipping 6 per cent to £3.3m.

The Department of Health is demanding £28m in compensation from Goldshield and three other companies over allegations of price-fixing. The companies are accused of breaching competition law to inflate the price of warfarin, an anticoagulant, to the NHS.

The lawsuit followed the Government's decision to call in the Serious Fraud Office to investigate the price of warfarin. Goldshield's offices and the home of the chief executive, Ajit Patel were raided in April 2002, and the SFO made a further visit to its Croydon offices a few months ago. The company denies acting fraudulently.

Goldshield also yesterday disclosed that it is involved in a further legal dispute with the administrators of Miza, an Irish company which used to manufacture pharmaceuticals for the company. The administrators claim Goldshield owes €20.8m (£13.8m) in connection with its acquisition of product rights from Miza in 2001.