ACCC gives GSK the all-clear following Sussan Ley’s referral

The competition watchdog has abandoned plans to take legal action against GSK in relation to drug pricing claims.

Minister for Health and Aged Care Sussan Ley.

The ACCC has abandoned plans take legal action against GlaxoSmithKline over alleged false and misleading statements after deciding its case wasn’t good enough.

Instead, ACCC chair Rod Sims today issued a strong warning to the drug company that it was being watched.

The investigation began late last year when Health Minister Sussan Ley attacked the drug company for blaming an increase in pricing for its Panadol Osteo product on PBS changes.

The product was removed from the PBS lists because of apparent duplication with Panadol or near equivalents able to be purchased for $5 or less a packet, when people were buying it on prescription for $7.52 a packet.

The government went through the PBS lists to remove similar close substitutes. Glaxo then increased the recommended retail price of its product from $7.69 to $9.99 a packet and blamed the PBS move for the increase.

Ley was quoted at the time saying “attempts by the makers of Panadol Osteo to link their proposed 50 per cent price increase to Government regulatory changes without any detail to support their claims can only be interpreted as an attempt to mislead consumers and pharmacists.”

She referred the matter to the ACCC last December.

In a statement today, the ACCC said “There can be a fine line between an ambiguous statement and a misleading one”.

ACCC chief Rod Sims added “Where price increases are attributable to a number of factors, businesses need to be careful in linking one factor, such as a change to Government policy, to an increase in prices so as not to mislead consumers.”

The ACCC doesn’t always issue press releases when dropping potential legal claims but this issue was very sensitive for the Government which didn’t want its PBS changes to be blamed for retail price hikes.

The regulator found the PBS removal had some impact on costs but was not the major factor and an increase in generic paracetamol products was also a factor.