GSK in the clear

Panadol Osteo pricing statement ambiguous, but not false or misleading: ACCC 

The Australian Competition and Consumer Commission has concluded its investigation into whether GlaxoSmithKline (GSK) made misleading statements about a price increase of its Panadol Osteo products.

The watchdog adjudged it was “unlikely to establish a contravention of the Australian Consumer Law” had occurred in relation to statements GSK had made that linked a price increase of Panadol Osteo to the delisting of the product from the PBS.

ACCC had investigated whether these statements were false, misleading or deceptive and said available evidence did not allow this to be established.

However, the ACCC release said the body did have “some significant concerns about the ambiguity of GSK’s statement”.

In December 2015 GSK sent a letter to pharmaceutical wholesalers stating:

“The Government recently confirmed most OTC [Over The Counter] medicines, including Panadol Osteo, will no longer be available on the PBS from 1st January, 2016.

In moving to an OTC business model, GlaxoSmithKline is no longer able to sustain its current pricing of Panadol Osteo. As such, there will be a price increase on Panadol Osteo from 1st January 2016”.

GSK also sent a letter to pharmacists making similar representations.

“GSK’s statements about the increase in price of Panadol Osteo did not make clear the reasons for it, leaving open to interpretation whether the delisting of the product from the PBS contributed to the price increase and to what extent,” said ACCC Chairman Rod Sims.

“There can be a fine line between an ambiguous statement and a misleading one.”

“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,” Mr Sims said.

The ACCC found that the delisting from the Pharmaceutical Benefits Scheme resulted in some modest indirect costs to GSK, but was only one of a number of reasons for the price increase. Other contributing factors included the entrance into the market of generic paracetamol 665mg products and the effect this had on sales of Panadol Osteo.

Click here for the full ACCC statement

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