Legal challenge to drug prices 'rip-off' begins

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A legal challenge to a "healthcare rip off" that allows drugs companies to fix prices on over-the-counter medicines began yesterday.

A legal challenge to a "healthcare rip off" that allows drugs companies to fix prices on over-the-counter medicines began yesterday.

The Office of Fair Trading is attempting to overturn the last vestiges of resale price maintenance, which it insists leads to "unnecessarily high prices". If successful, campaigners estimate the challenge could save consumers as much as £300m a year.

Yesterday the Restrictive Practices Court in London began a major investigation - expected to last the rest of the year - into the law, which allows suppliers to set minimum prices for common remedies including painkillers, cold and cough medicines, vitamins, skin treatments and anti-smoking products.

Paul Mason, chief operating officer of Asda, said: "Shoppers are looking to the court to end the healthcare rip-off. And we'll be speaking up for the elderly and families with young kids who are fed up with paying through the nose for ordinary healthcare items."

However, the Community Pharmacy Action Group challenged that notion, insisting that abolishing the practice would cost the consumer dearly and lead to higher prices, less choice and the loss of local chemists. Mark Cran QC, representing the action group, said the exemption order was made under the Resale Prices Act in 1970 to protect small chemists. He said vulnerable people, such as the elderly,disabled and young mothers, relied on their neighbourhood pharmacists.

By promoting a narrow range of bestselling lines with initial price cuts, supermarkets would force chemists to close in the same way that the local grocer, butcher, baker and fishmonger was disappearing from the High Street, he said.

The case continues.