Reckitt fined £10.2m for cutting out NHS supply competition

Household goods giant Reckitt Benckiser has been hit with a £10.2 million fine for abusing its dominant position in the supply of its Gaviscon heartburn treatment to the NHS.

The Office of Fair Trading (OFT) issued the penalty after the firm admitted anti-competitive behaviour in supplying heartburn treatment to the health service - a market costing the NHS up to 20m a year.

The competition watchdog, which first made the claims in February, said Reckitt sought to restrict competition to its Gaviscon treatment by offering family doctors only a more expensive version of the product when they searched prescribing software.

The group admitted infringing UK and European competition law and the OFT said its admission and early co-operation saw its fine reduced from a potential 12m.

Doctors use software to search for well-branded products and provide patients with an "open" prescription that lists its generic name. This allows pharmacies to choose whether to dispense the brand or a cheaper rival, at considerable savings to the NHS.

The OFT said Reckitt deliberately delisted a sister product in 2005 just before cheaper generic rivals joined the list.

The timing of this meant that an NHS doctor searching for Gaviscon would instead bring up its Gaviscon Advance Liquid - a patent-protected version which did not have an "open" prescription that would have allowed generic rivals to be shown to GPs, according to the OFT.

John Fingleton, the watchdog's chief executive, said: "This case underlines our determination to prevent companies with a dominant position in a market from using their strength to seek to restrict competition."

Reckitt said: "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."