The penalty was handed out by Britain's competition
watchdog, the Office of Fair Trading (OFT), in its first fine handed down for
abuse of a dominant position since 2003 and followed complaints from a generic
producer of the medicine.
Reckitt admitted infringing British and European competition
law by withdrawing and delisting Gaviscon Liquid original from Britain's
National Health Service (NHS) prescription service in 2005 and replacing it
with a different-formula Gaviscon Liquid advance, for which there is no generic
rival.
It meant that when family doctors searched for the product
under the Gaviscon brand, the NHS prescription database would find only the
advance version — which is still patent protected — and no cheaper generic
alternatives.
Irish generic medicine maker Pinewood helped bring the
action because the move affected sales of its Gaviscon alternative, Acidex.
“This shows that big companies cannot abuse a dominant
position and escape unpunished for anti-competitive behavior,” said Marc
Israel, competition lawyer at law firm Macfarlanes which acted for Pinewood in
the action.
“Acidex is widely available but Reckitt's conduct resulted
in market penetration of the cheaper generic alternative being severely
limited.” The OFT, which first highlighted in February the possible abuse by
Reckitt, said the fine was reduced from £12 million to reflect the British
consumer goods group's admission and decision to cooperate with the OFT.
“Vigorous competition between firms supplying the public
sector is vital to ensure taxpayers get the best value for money,” OFT chief
executive John Fingleton said.
Reckitt replied in a statement: “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
and have agreed to settle.” Reckitt shares were 0.1 percent higher at £34.54 by
1200 GMT, valuing the group, which also makes Nurofen painkillers, Finish
dishwasher products and Air Wick air fresheners, at around £25 billion.
