Reckitt Benckiser - Gaviscon Anti-competitive Behaviour

Gaviscon Anti-competitive Behaviour

In 2008, the BBC's Newsnight programme broadcast a report which accused Reckitt Benckiser of attempting to delay the introduction of a competitive, generic version of one of its most popular products, Gaviscon, a treatment for heartburn and gastroesophageal reflux disease. Introducing the report, reporter Martin Shankleman said, "Gaviscon is hailed as a power brand by its owners, Reckitt Benckiser." He continued,

"Reckitt Benckiser like to claim that the profits flow from their expertise in marketing. But we know that there's another way in which they've been coining it in—by ripping-off the NHS; as a whistle-blower has told us.

The "whistle-blower" was shown in silhouette and his words were spoken by an actor: "Reckitt's cheated the National Health Service. It could have saved the NHS millions of pounds. But not just the NHS, patients, doctors—they've cheated health professionals. I felt it had to be exposed".

Newsnight claimed that Reckitt Benckiser had a "secret plan to ensure that it kept its stranglehold" after the Gaviscon patent expired in 1999, and that Newsnight had seen the plan. The Department of Health asked Newsnight to hand its documents to the NHS counter-fraud service.

The investigation was widely reported in the British press. The Guardian quoted a leaked memo in which the product's manager explained that the company could use "the rationale of health and safety" to design a switched product to "muddy the waters." The newspaper quoted Reckitt Benckiser as stating that the leaked memos were "inappropriate and did not reflect Reckitt's eventual actions".

The Independent quoted Warwick Smith, director of the British Generic Manufacturers Association (BGMA): "The sort of evergreening alleged by Newsnight can cost the NHS tens of millions of pounds with no patient benefit." It also quoted a statement issued by the company: "...Reckitt Benckiser is a responsible company and we have therefore instigated an immediate internal investigation and will take action. However, we do not accept much of what has been alleged."

The Times noted that "Although Gaviscon has been out of patent for almost ten years, no other manufacturer has developed a cheap generic version. Such a drug could have saved the NHS up to £40 million." It stated that the Office of Fair Trading was expected to examine whether Reckitt had acted illegally. It also printed verbatim extracts from several of the leaked memos. The Times report included an extract from the statement issued by the company (see below).

In response to the Newsnight report and the reports in the press, Reckitt Benckiser issued a statement which began:

We are shocked by the allegations made as Reckitt Benckiser is a responsible company in the way it conducts its business.

Nevertheless, we are deeply concerned by the inappropriate sentiment expressed in some of the historic internal correspondence reported. We take this very seriously and have instigated an immediate internal investigation, and will take action. We also refute much of what has been reported which implies a power and influence we simply do not possess.

The company has never objected to a monograph driven generic name being published. The timetable of which is not, and never has been, within our control a monograph/generic name could have been published at any time by the regulators without reference to any third party.

The company made appropriate challenges where it felt it was justified in order to ensure patients are prescribed the right treatment. These were within the law and relevant regulations. We stress that the regulators only take a comment into account when it is valid. —

On 15 October 2010, Reckitt Benckiser was fined £10.2m by the Office of Fair Trading after the company admitted anti-competitive behaviour.