THE Department of Health (DoH) is to announce a compensation settlement with a third generic drug maker at the centre of an alleged £150 million price-rigging scam, The Times has learnt.

Investigators at the NHS’s counter-fraud unit are close to unveiling the deal with the company, which is involved in a ring that allegedly ramped up the prices of three key drugs.

Details of the deal, which could involve compensation to the DoH of between £5 million and £10 million, could be released as early as next week.

News of the breakthrough emerged yesterday as the Serious Fraud Office (SFO) said that it would charge nine executives with conspiracy to defraud the NHS after its own investigators completed a parallel inquiry into the scandal. Ajit Patel, the chief executive of Goldshield Group, and Kirti Patel, a director with the company, confirmed that they would answer fraud charges at a hearing on Friday. A further seven executives who all hold or held senior posts with nine other generic drug makers will join them at the hearing.

In a statement to the Stock Exchange yesterday, Goldshield said that it was disappointed by news of the charges but added that the company was “prepared for the challenges ahead”. The company and its directors maintain that they did not act in a way that was unlawful or improper.

Both the DoH and the SFO began investigations into the pricing and supply of drugs to the NHS in April 2002, after an unexplained surge in prices. Investigators allege that executives at ten companies conspired from 1996 to 2001 to fix prices on copycat versions of three drugs: Warfarin, a blood-thinning medicine; Zantac, a stomach ulcer treatment; and a range of penicillin-based antibiotics. In some cases the mark-up was allegedly as much as 100 per cent. Companies allegedly involved include Norton Healthcare, Kent Pharmaceuticals, Regent-GM Laboratories and DDSA Pharmaceuticals, as well as Goldshield. All the companies strongly deny any wrongdoing.

The DoH has instigated civil proceedings and has reached a £12 million settlement with Generics UK, a subsidiary of the German drugs group Merck, and a £4.5 million deal with Ranbaxy, the Indian copycat drugs maker. Neither company has admitted liability.

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