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Drug giants slapped down for profiteering

Adam Zuchetti
Adam Zuchetti
06 December 2017 1 minute readShare
Burning money, coins

Two of the world’s biggest pharmaceutical companies are facing court over alleged profiteering by blatantly misleading consumers in their product advertising.

GlaxoSmithKline Healthcare Australia (GSK) and Novartis Consumer Health Australasia will face the Federal Court of Australia after the ACCC accused them of misleading marketing in relation to two of their Voltaren pain relief products: Voltaren Osteo Gel and Voltaren Emulgel.

“We allege that consumers are likely to have been misled into purchasing Osteo Gel, thinking that it is different [from] Emulgel and more effective for treating osteoarthritis conditions, when this is not the case,” ACCC chairman Rod Sims said.

“In fact, the product has an identical formulation to Emulgel, and both products are equally effective in treating not only osteoarthritis but also a range of other pain conditions.”

According to Mr Sims, the Osteo Gel variety was sold at a significant premium — as much as 33 per cent higher — than Emulgel, despite both products having identical active ingredients and formula.

“We allege GSK and Novartis engaged in a deliberate commercial strategy to differentiate the products in a way that was likely to mislead consumers,” Mr Sims said.

“The alleged conduct is particularly concerning, given the significant penalties handed down by the court against the makers of Nurofen for what we consider to be similar conduct.”

In the Nurofen case, exactly 12 months ago, Nurofen maker Reckitt Benckiser was handed a hefty $6 million penalty for marketing products as providing targeted relief when the ingredients were in fact general pain relievers.

The $6 million figure as secured by the ACCC in the Federal Court after it appealed an earlier $1.7 million fine, which it argued at the time was too lenient.

“This is the highest corporate penalty awarded for misleading conduct under the Australian Consumer Law,” Mr Sims said at the time.

Drug giants slapped down for profiteering
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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