18 October 2010

Reckitt Benckiser agrees to pay penalty

Pharmaceutical giant Reckitt Benckiser has agreed to pay £10.2 million after admitting that it infringed UK and European competition law by withdrawing Gaviscon Original Liquid from the NHS in 2005.

The fine was reduced from £12 million to reflect Reckitt Benckiser's admission and decision to co-operate as part of an early resolution agreement with the Office of Fair Trading (OFT).

The OFT's allegation was that Reckitt Benckiser withdrew NHS packs of Gaviscon Original Liquid from the NHS prescription channel after the product's patent had expired but before the publication of the generic name for it, so that more prescriptions would be issued for its alternative product, Gaviscon Advance Liquid.

Pharmacies that receive prescriptions for Gaviscon Advance Liquid must dispense it, as it is patent protected and there are no generic equivalent medicines.

John Fingleton, the OFT Chief Executive, said, “Vigorous competition between firms supplying the public sector is vital to ensure taxpayers get the best value for money.

“This case underlines our determination to prevent companies with a dominant position in a market from using their strength to seek to restrict competition from rivals. The imposition of penalties should serve to deter firms from engaging in anticompetitive behaviour of this sort in future.

“We welcome Reckitt Benckiser's early co-operation which will enable the swift resolution of this complex case and will reduce the costs of the investigation both for the OFT and for the company itself.”