This was no great shock, I have to say. Never mind Northern Rock, the pharmaceutical companies ought to be nationalised…
Gaviscon maker ‘cheated the NHS’
By Meirion Jones
BBC Newsnight producer
Reckitt Benckiser’s actions are said to have cost the NHS millions
The makers of Gaviscon maintained an effective monopoly on the market for years after the stomach medicine came off patent, Newsnight has been told.
Internal documents show Reckitt Benckiser executives schemed to create obstacles to block rival manufacturers from selling cheap generic copies.
A former senior executive said Reckitt had “cheated the NHS” and could have saved it “millions of pounds”.
Reckitt said it was a responsible firm which behaved honestly and ethically.
Newsnight was told Reckitt sold Gaviscon to the NHS for three times the cost of generic drugs.
Executives also boasted that they had influenced regulatory bodies to delay the introduction of a generic name for Gaviscon.
We are shocked by the allegations made as Reckitt Benckiser is a responsible companyReckitt Benckiser Healthcare UK
The generic name should have been published in 2000 but Reckitt objected.
The same happened again in 2003 and Reckitt made further objections in 2005 and 2006.
In each case it cited health and patient safety as the reason for its objections but the secret internal documents tell a different story.
One Reckitt executive wrote: “Should we not drag it out as long as possible… nine million pounds of business is at stake”.
Others wrote of their intention to create “a further barrier to competitors” and “restrict entry for new competitors” by abusing the regulatory process.
Should we not drag it out as long as possible… nine million pounds of business is at stakeE-mail by Reckitt executive
John Schmidt, a competition lawyer from Shepherd and Wedderburn, has examined some of the e-mails and business plans which were supposed to be shredded.
He told Newsnight they raised the question of whether Reckitt had been in breach of competition law.
He said there were “smoking guns in the e-mails so I would be very surprised if the Office of Fair Trading wasn’t interested”.
While the delaying tactics continued, Reckitt persuaded doctors to switch patients to a form of Gaviscon which was still under patent.
The techniques they used to do this were sometimes questionable.
The pharmaceutical companies’ own trade body – the ABPI – found that Reckitt had misled doctors and behaved unethically in its dealings with some GPs in Glasgow.
Reckitt says this was an unfortunate one-off incident.
Nine years after its patent elapsed, Gaviscon still has 88% of the market for alginic acid compounds in the National Health Service and there is still no generic name.
Generic copies of Gaviscon could have saved around £40m from the drugs budget since 1999.
Parliament’s health select committee is expected to investigate the Gaviscon case.
Committee member and former doctor Richard Taylor MP said: “I have regular letters from people with cancer and other serious problems who cannot get the drugs and that’s where we should be spending the money, rather than giving companies huge profits on drugs that aren’t really an advance.”
Reckitt Benckiser told Newsnight it was a responsible company which behaved honestly and ethically at all times and that, from the outset, patient care and safety has driven all its actions.
It said it had never objected to a generic name being published, “the timetable of which is not within our control”.
However, it also expressed concern at what it called “the inappropriate sentiment” in some of the internal correspondence of 2003 and would be taking action.