Household goods giant Reckitt Benckiser was fined £10.2 million today for abusing its dominant position in the supply of its Gaviscon heartburn treatment to the NHS.
The Office of Fair Trading (OFT) hit the group with the penalty after Reckitt admitted anti-competitive behaviour in supplying heartburn treatment to the health service - a market costing the NHS £15 million to £20 million a year.
The competition watchdog, which first made the claims in February, said Reckitt sought to restrict competition to its Gaviscon treatment by offering family doctors only a more expensive version of the product when they searched prescribing software.
Reckitt admitted infringing UK and European competition law and the OFT said its admission and early co-operation saw its fine reduced from a potential £12 million.
Doctors use software to search for well-branded products and then provide patients with an "open" prescription which lists its generic name.
This allows pharmacies to choose whether to dispense the brand or a cheaper rival, at considerable cost savings to the NHS.
The OFT said Reckitt deliberately delisted a sister product in 2005 just before cheaper generic rivals joined the list.
The timing of this meant that an NHS doctor searching for Gaviscon would instead bring up its Gaviscon Advance Liquid - a patent protected version which did not have an "open" prescription that would have allowed generic rivals to be shown to GPs, according to the OFT.
John Fingleton, chief executive of the OFT, 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 anti-competitive behaviour of this sort in future."
Reckitt said: "This OFT investigation relates to an infringement that took place a number of years ago under a highly complex area of competition law, on which there have only more recently been clarifying cases.
"Therefore, while the company believed at the time it was acting within the law, as is always our intent, we respect the view of the OFT in this matter and have agreed to settle."Reuse content