Reckitt Benckiser to pay reduced OFT fine
Reckitt Benckiser is in trouble over its Gaviscon product.
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Friday, 15, Oct 2010 12:49
By Chris Malone
Reckitt Benckiser, which owns medicine brand Gaviscon, has agreed to pay a £10.2 million fine to the Office of Fair Trading (OFT).
The firm had been subject to a £12 million charge, but had it reduced after admitting to allegations that it withdrew and de-listed one of its products to deliberately influence competition.
According to the OFT, Reckitt Benckiser had removed its Gaviscon Original Liquid from the NHS prescription channel in 2005, after it patent had expired, but before the publication of a generic name for it.
This effectively meant that GPs would have to prescribe Gaviscon Advance Liquid, due to the way their computer systems work.
Doctors are able to search for a brand and browse its cheaper generic equivalents using their prescribing software, but Reckitt Benckiser's timing of the withdrawal assured that it would be difficult for GPs to find a generic alternative to Gaviscon Original Liquid.
This meant they would prescribe Gaviscon Advance Liquid instead, ensuring Reckitt Benckiser profited through a lack of competition.
OFT chief executive John Fingledon explained that competition helps 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," he said.
In other news, the OFT today provided some new guidance on land agreements following a change in the law.