An investigation carried out by the Australian Competition and Consumer Commission (ACCC) has found that statements made by GlaxoSmithKline (GSK) about a price increase of its Panadol Osteo products were 'ambiguous' but not 'misleading'.
The consumer watchdog investigated concerns that the drug company made statements that linked a price increase of the product to its delisting from the Pharmaceutical Benefits Scheme (PBS).
The company’s decision followed a government announcement made in November last year that various medicines would be removed from the PBS if they were also available over-the-counter and cost less than the standard co-payment amount.
GSK sent a letter to pharmaceutical wholesalers in December last year stating the government’s decision.
Further, the company said it is no longer able to sustain its existing pricing of Panadol Osteo and there will be a price increase on the product.
At that time, pharmacists also received a letter from GSK that made similar representations.
ACCC chairman Rod Sims said: “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.”
“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.”
The ACCC found that the delisting from the PBS resulted in some modest indirect costs to GSK, but was only one of various reasons for the price hike.