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EDITIONS
 Wednesday, 16 May, 2001, 05:53 GMT 06:53 UK
Supermarkets slash medicine prices
Medicine
The price cuts could save consumers millions
The price of over-the-counter medicines has been slashed by up to half in leading supermarkets following a High Court ruling lifting a law that fixed the retail cost.

The move is expected to save consumers millions of pounds, with Sainsbury's, Tesco and Safeway cutting the price of certain medicines and vitamins.

It could also prompt a fierce price war, with Boots already introducing a range of new promotions on medicines in an effort to stop supermarkets poaching its customers.

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
The ruling has been condemned by the Community Pharmacy Action Group (CPAG). It says the move could lead to the closure of 12,000 local pharmacies.

The Office of Fair Trading (OFT) challenged the price-fixing law - known as resale price maintenance - in the Restrictive Practices Court, arguing that it allowed drug companies to keep branded over-the-counter products artificially high.

CPAG had campaigned to keep RPM, arguing that high street chemist shops would lose business and be forced to close if the supermarkets launch price-cutting wars.

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

Against public interest

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

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.

  WATCH/LISTEN
  ON THIS STORY
  The BBC's Nicola Carslaw
"After a complex legal battle an historic result"
  David Sharpe, Community Pharmacists Action Group
"You can't give advice off a supermarket shelf"
  Phil Evans, Consumers' Association
"It is a tax on sick consumers"
  Sheila Kelly, Proprietary Assoc. of Great Britain
"We weren't going to win the case"
See also:

16 May 01 | UK
15 May 01 | Business
15 May 01 | Business
19 Oct 00 | Business
14 Oct 00 | Health
16 Oct 00 | Health
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