Generic medicines are drugs that are no longer protected by patent, so they can be copied by other manufacturers at a lower cost. This makes them attractive to the NHS because they are generally less expensive than branded products, saving money while retaining the active ingredients and efficacy of successful drugs.

The prescribing of generic medicines in Britain is far higher than in many EU countries and is increasing. They account for more than 55 per cent of all prescriptions for NHS patients in England, compared with about 35 per cent in the mid-1980s. Some GPs prescribe more than 90 per cent of medicines as generics.

If drug companies can form cartels to elevate the price of these medicines, however, the savings can be nullified.

At the end of the 1990s suppliers are thought to have orchestrated a rise worth up to £200 million a year in the prices of dozens of usually cheap generic drugs. Fears over such an arrangement prompted the case against the five companies and nine individuals accused of conspiring to defraud the NHS on the supply of warfarin, a blood-thinning drug, and penicillin-based antibiotics.

The NHS has already recovered £34 million through a civil lawsuit against these firms, but now the Serious Fraud Office seems powerless to gain convictions for any price fixing through the criminal courts, if it occurred prior to the 2002 Enterprise Act.

The NHS's own watchdog, the Counter Fraud and Security Management Service, has been praised widely since it was established ten years ago. By 2005 it had saved the health service more than £670 million.

Fraud investigators have looked at the sale of a further 30 drugs, including the beta-blocker atenolol, the hypothyroidism pill thyroxine and the blood pressure drugs bendrofluazide and frusemide. They have, however, sought out-of-court settlements where possible, as the money spent on High Court action could be used to fund an arguably more pressing need - patient care.

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