But pharmacists warned that the OFT's move could sound the death-knell for the small local pharmacy, with as many as one in four facing closure.
John Bridgeman, director-general for the OFT, said yesterday that he was taking legal action to end resale price maintenance (RPM) - the practice of manufacturers stipulating the price to be charged to customers - on nearly 2,300 products which include antiseptics, painkillers, indigestion remedies, vitamins, minerals and laxatives. He said its abolition would save the consumer pounds 180m a year.
Pharmacists have argued that removing RPM will put small chemists, who provide a valuable service to the community over and above dispensing medicine, at the mercy of large supermarket chains which will be able to discount more heavily than they can.
The Community Pharmacy Action Group (CPAG) claimed the move could lead to up to one-quarter of pharmacies closing, and described Mr Bridgeman's decision as a "massive threat to Britain's health care".
Resale price maintenance was made unlawful in the Sixties except for books and over-the-counter medicines. The review of the policy began a year ago after the supermarket chain Asda, which was a key player in ending the book price-fixing agreement, defied RPM by slashing prices on products such as Anadin.
Mr Bridgeman said that chemists in general were more secure than they had been in 1970 when the last attempt to overturn RPM on non-prescription medicines had been made. "A higher proportion of chemists' turnover is now from prescriptions: the figure is more than 70 per cent compared with 50 per cent in 1970," he said. The products on which price competition would be possible accounted for only 3-4 per cent of their business. "Many chemists will welcome this move, they will become more competent and efficient," he said.
But David Sharpe, chairman of CPAG, condemned the move and said: "RPM is a tried and tested way of guaranteeing a widespread network of community pharmacies which gives everyone in the UK access to professional advice and a wide range of medicines. Is it worth sacrificing such an essential service for a saving of 6p per person per week at the very most? We know the UK public don't think so."
Labour's consumer affairs spokesman, Nigel Griffiths, said he was "very concerned" by the announcement. "Each chemist gets about pounds 7,000 income from these RPM products," he said. "The OFT is playing into the hands of the big retailers."
But Laura Simons, senior public affairs officer for the Consumers' Association, said: "We are delighted at this important first step towards the abolition of RPM which has forced consumers to pay a high price without any improvement in access to pharmacy despite industry claims."
Big savings in store for customers
Branded product RPM price Own-label
Anadin Extra (24 pack) pounds 2.22 99p
Lemsip (10) pounds 3.39 pounds 1.69
Seven Seas Cod
Liver Oil (60) pounds 3.59 pounds 1.79
Sanatogen Vitamin C
500mg (60) pounds 3.85 pounds 1.90
Nurofen (12) pounds 1.39 69p
All prices from AsdaReuse content