Isaac Kaye

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Background

Isaac Kaye (born South Africa) is Deputy Chief Executive of the IVAX Corporation and Chairman of Norton Healthcare. in 2002, he is described by the Guardian as being a 'seventysomething multi-millionaire' who 'moved to Britain in 1985, took Irish citizenship and salted away a small fortune in a Channel Islands trust fund from a US business deal'[1].

Kaye's first company in Britain was called Harris, which was sold to Florida based IVAX Corpin in 1990. Harris was then renamed Norton Healthcare, which was later changed to Ivax Pharmaceuticals UK. Kaye is reported to have 'made £23m from the deal and has a £12m stake in the parent company'[2].

The Ivax Corporation is a huge Florida-based health company. Norton Healthcare, the largest generic drugs company in Britain, is a subsidiary of IVAX. Kaye earned $550,301 at IVAX in 1998 (plus share options worth up to $1.5 million) and $521,520 in 1997.[3] He lives in a luxury apartment in Grosvenor Square, London.[4]. In 2002, Kaye is reported to live in Mayfair[5].

South Africa's Apartheid regime

Kaye was a supporter of the South Africa's Apartheid regime[6], the Afrikaner-led National party[7]. Such claims are reported to be contested by Kaye’s lawyer. However, as Osler states[8], 'it was admitted that Kaye did back one National Party candidate on grounds of childhood friendship' and he is reported to have offered National Party minister for health Dr Lapa Munnik the 'use of cars to transport supporters to the polls at a crucial 1979 by-election'. Munnik is reported to be 'an apartheid stalwart who threatened to close Catholic schools if they dared to admit non-white pupils'. Kaye also served on the board of South African Druggists (1977-1982) whose 'executives were also seconded to assist the election efforts of the Afrikaaner-led National Party'.

Supporting Labour

Kaye spent £5,000 in 1997 and 1998 on tickets for Labour gala dinners and donated £100,000 to Labour in 1999[9]. He also gave £10,000 to the London mayoral campaign of Frank Dobson, the former Labour health secretary. According to The Guardian, the Labour party has declined to comment on its relationship with Kaye. He gave the Labour Party more than £5,000 in 2000.[10]

Gifts for influence

The Guardian reported that[11]...

'Kaye was caught up in a "gifts for influence" scandal in South Africa during the early 1980s amid claims that doctors were being rewarded with everything from cars and TVs to swimming pool equipment and chandeliers for prescribing drugs made by his then firm. He denied any impropriety, saying the giving of presents was not an inducement but an appreciation'.

In 1996, Norton Healthcare was severely condemned by the British Pharmaceutical Association for offering "unnacceptable inducements" (including mountain bikes and Marks and Spencers vouchers) to pharmacists who increased their orders for Norton products.[12] Kaye refuses to recognise Trade Unions at Norton Healthcare because they are "not in line with company philosophy"! According to Osler, 'In May 2000, a Kentucky judge ruled that Norton unlawfully violated the rights of its nurses at one of its US hospitals, by barring them from union activity in their own time. This was held to be in violation of the National Labor Relations Act'[13].

In 1996-7 Norton received a £990,000 Regional Selective Assistance grant from the Government to set up a new plant in London. In October 1998 it closed down all its other manufacturing and packaging plants in South East England and moved them to Ireland, cutting 500 jobs in the process. This "re-structuring" helped the IVAX Corporation's share price to rise by 80% in 1998 - Kaye is the second largest shareholder, with a stake worth $136 million held by the I. Kaye Family Trust (via a Guernsey-based company called Charter Trust, which in turn hold the shares via another company called Azure Ltd).[14]

NHS £400m rip-off?

When Frank Dobson was Health Minister he called on the NHS to save money by buying cheaper generic drugs, rather than expensive name brands. However, as NHS spending shifted to the generic drugs, their prices increased too - for instance, by 1999 the price of a pack of Norton Healthcare Thyroxine tablets had increased from £6.84 12 months earlier, to £44.89![15] As a result the NHS doesn't save money, but the IVAX Corporation makes huge profits. As stated by Osler, 'Such tactics saw Ivax’s profits rise over 70% in 2000, despite a 12% decline in turnover'[16]. IVAX's "Easi-Breathe" inhaler has been named a Millennium Product by the Government and is displayed in the Dome.[17]

In 2002 The Guardian reported that, Kaye's company was 'raided by police investigating an alleged £400m rip-off of the NHS' and was 'one of six firms suspected of being involved in a price fixing cartel to push up prices charged to the NHS'. IVAX denied any 'wrongdoing'[18]. After initial enquiries carried out by the Counter Fraud Directorate of the Department of Health, The Serious Fraud Office (SFO) began an investigation 'into a suspected conspiracy to defraud the NHS in relation to prices charged by suppliers for prescribed penicillin based antibiotics and warfarin between 1st January 1996 and 31st December 2000'[19].

The six pharmaceutical companies being investigated were:

The SFO later (27th April 2006) reported[20] that nine persons appeared in court on 'charges of conspiracy to defraud the National Health Service' along with 5 Companies (including Norton Healthcare) 'on conspiracy to defraud charges'. The 'persons' were Jonathan Raymond Close and Nicholas Mark Foster (both formerly of Norton Healthcare Limited) alongside Denis William O’Neill and John Stephen Clark (of Kent Pharmaceuticals Limited), Luma Auchi (formerly of Regent-GM Laboratories), Michael John Frederick Sparrow (formerly of Generics (UK) Limited), Anil Kumar Sharma (formerly of Ranbaxy (UK) Limited), Ajit Ramanlal Patel and Kirti Vinubhai Patel (of Goldshield Group Plc). It is not clear what the outcome of the charges were, however Medical News Today reported on the 9th April 2006[21] that The Department of Health and Norton Healthcare Ltd and Norton Pharmaceuticals Ltd had 'jointly announce settlement of the claims'. Norton did not admit any liability in relation to the charges but did pay compensation to the NHS for the amount of £13.5 million. In the report, Jim Gee (Director of Counter Fraud Services for the Department of Health) stated that "Norton is the third of the defendant companies to have recognised the strength of the claim made by the NHS..."

Subsidiaries

The IVAX Corporation's other subsidiaries include Zenith Goldline Pharmaceuticals, Goldcaps Inc., Diamedix Corporation, Baker Norton Pharmaceuticals, Immunovision and DVM Pharmaceuticals (all based in Florida), Gelkaps GmbH (Germany), Elvetium S.A. (Argentina), Baker Norton Asia (Hong Kong), Delta Biologicals (Italy) and Galena a.s. Opava (Czech Republic).

Affiliations

Notes

  1. ↑ Maguire K (2002) Profile:Isaac Kaye The Guardian 13th April 2002. Accessed 4th April 2008
  2. ↑ Maguire K (2002) Profile:Isaac Kaye The Guardian 13th April 2002. Accessed 4th April 2008
  3. ↑ Ref needed
  4. ↑ Ref needed
  5. ↑ Maguire K (2002) Profile:Isaac Kaye The Guardian 13th April 2002. Accessed 4th April 2008
  6. ↑ Michael Gillard, 28th September 2000. Apartheid Supporter Who Is a £100,000 Backer of Labour. The Daily Express
  7. ↑ Maguire K (2002) Profile:Isaac Kaye The Guardian 13th April 2002. Accessed 4th April 2008
  8. ↑ Osler, D. (2006) New Labour and the generic medicine scam Accessed 4th April 2008
  9. ↑ Maguire K (2002) Profile:Isaac Kaye The Guardian 13th April 2002. Accessed 4th April 2008
  10. ↑ Ref needed
  11. ↑ Maguire K (2002) Profile:Isaac Kaye The Guardian 13th April 2002. Accessed 4th April 2008
  12. ↑ Death of the Noble Idea Posted February 5, 2008 Big money trumps everything in politics, even the most dearly-held beliefs By George Monbiot. Published in the Guardian 5th February 2008
  13. ↑ Osler, D. (2006) New Labour and the generic medicine scam Accessed 4th April 2008
  14. ↑ Ref needed
  15. ↑ Osler, D. (2006) New Labour and the generic medicine scam Accessed 4th April 2008
  16. ↑ Osler, D. (2006) New Labour and the generic medicine scam Accessed 4th April 2008
  17. ↑ Ref needed
  18. ↑ Maguire K (2002) Profile:Isaac Kaye The Guardian 13th April 2002. Accessed 4th April 2008
  19. ↑ Serious Fraud Office Suspected fraud on the National Health Service Press release 10th April 2002. Accessed 4th April 2008
  20. ↑ Serious Fraud Office Fraud on the National Health Service. Appearance at Magistrates Court Accessed 4th April 2008
  21. ↑ Medical News Today Norton Settles NHS Claim For 'Price Fixing', UK 9th April 2006. Accessed 4th April 2008
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