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The BBC's Nicola Carslaw
"After a complex legal battle an historic result"
 real 56k

David Sharpe, Community Pharmacists Action Group
"You can't give advice off a supermarket shelf"
 real 56k

Phil Evans, Consumers' Association
"It is a tax on sick consumers"
 real 28k

Sheila Kelly, Proprietary Assoc. of Great Britain
"We weren't going to win the case"
 real 56k

Tuesday, 15 May, 2001, 23:46 GMT 00:46 UK
Medicine prices set to fall
Drugs on display
The price of many drugs is expected to fall
Consumers are expected to save millions of pounds with a court ruling to end the artificially high price of over-the-counter medicines.

A price war in the 1.6bn drug market is expected after a court lifted the last price-fixing law in the UK - known as resale price maintenance (RPM).

New prices
Sainsbury's - 16 Nurofen now 1.14 from 2.29
Sainsbury's - Seven Seas Evening Primrose Oil now 2.79 from 5.59
Tesco - 16 Anadin Extra 1.29 from 2.15
Tesco has said it will slash up to 40% from the price of some medicines from Wednesday, including Calpol and Nurofen, and Asda and Safeway have also announced similar cuts.

The Office of Fair Trading (OFT) challenged RPM in the Restrictive Practices Court, arguing that it allowed drug companies to keep branded over-the-counter products artificially high.

The Community Pharmacy Action Group (CPAG) had campaigned to keep RPM, claiming its abolition would lead to the closure of 12,000 local pharmacies.

It argued high street chemist shops would lose business and be forced to close if the supermarkets launch fierce price-cutting wars.

Against public interest

The court found there was insufficient evidence that a significant number of pharmacies would be shut and ruled RPM was against the public interest.

"This is excellent news for consumers who will now benefit from lower and more competitive prices for common household medicines," said John Vickers, director general of the OFT.


Many pharmacists will simply not be able to survive given the buying power and aggressive pricing tactics of the supermarkets

David Sharpe
CPAG
But the outcome has been condemned as a "devastating blow" to Britain's pharmacies by CPAG's chairman and community chemist, David Sharpe.

"Many pharmacists will simply not be able to survive given the buying power and aggressive pricing tactics of the supermarkets," Mr Sharpe said.

"We continue to believe that we have a strong case and that many pharmacists rely on RPM to stay in business. However, having been given the clear indication that we are unlikely to win, it is in no one's interest to continue incurring further costs," he added.

The case was brought to the High Court last October by the OFT.

A spokesman for Boots said he was "disappointed" with the court's decision and estimated the move will knock 15m off full year profits.

Shares in Boots, the biggest chain of pharmacies in the UK, fell 4.5% on the news.

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See also:

15 May 01 | Business
Why medicines will get cheaper
19 Oct 00 | Business
Pharmacies face bitter pill
14 Oct 00 | Health
Chemists face legal challenge
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