Receive the latest mybusiness news
Copyright © 2020 MOMENTUMMEDIA

Drugmakers ‘misled consumers’, rules Federal Court

Adam Zuchetti
Adam Zuchetti
20 May 2019 2 minute readShare
GlaxoSmithKline and Novartis

Pharmaceutical giants GlaxoSmithKline Healthcare Australia and Novartis Consumer Health Australasia have admitted they broke consumer laws by misleading shoppers in regard to pain relief products.

The Federal Court ruled that both GSK and Novartis had breached Australian Consumer Law by making false or misleading assertions in the marketing of two Voltaren pain relief products: Voltaren Osteo Gel and Voltaren Emulgel.

Proceedings were taken by the ACCC after it found that the two products had been sold at different prices despite having the same active ingredients, it said in a statement — emulating a previous court ruling against the makers of Nurofen, Reckitt Benckiser, for similar conduct.

“Novartis and GSK misled osteoarthritis sufferers into buying the more expensive Osteo Gel thinking that it was more effective than Emulgel for treating their symptoms, when this is not the case,” ACCC commissioner Sarah Court said.

According to the ACCC, these claims were made on product packaging as well as in website marketing.

Both companies admitted to breaching consumer protection laws.

The legal action had been flagged by the competition regulator back in December 2017.

The ACCC said that a separate hearing at an unspecified later date will be held to determine penalties.

Those penalties could run into the millions of dollars, given the precedent set by the Nurofen case which culminated in a $6 million penalty for Reckitt Benckiser.

Warning to businesses on misleading consumers

Ms Court said that the case should be a warning to businesses of all size about the claims they make to consumers, and the positioning of identical products.

“This case serves as a warning to all businesses that misleading consumers into thinking that products are specifically formulated to treat or target certain conditions when this is not the case can lead to serious consequences,” she said.

“Novartis and GSK’s conduct continued after the ACCC’s successful action against the makers of Nurofen for similar conduct involving its pain relief products. In this case, both gels are identical and are equally effective in treating osteoarthritis symptoms and a range of other pain conditions.”

GSK ‘pleased’ with court ruling

Despite the finding against the company, GSK issued a statement in which it said it was “pleased” with the outcome.

“We are pleased with today’s decision in relation to the revised Voltaren Osteo Gel packaging that we supplied to the Australian market from March 2017 until the end of May 2018,” it said.

“We take consumer law seriously. Last year, we admitted allegations in relation to certain historical packaging [that was supplied to the Australian market before March 2017] and some historical website content related to Voltaren Osteo Gel.”

GSK added: “It is important to clarify that certain actions taken by the ACCC in the recent years provided greater clarity around the expectations of companies marketing medicinal products.

“We responded to this clarification proactively when concerns were raised and made changes to Voltaren Osteo Gel packaging to help ensure we continued to meet the expectations of regulators and consumers.

“It would not be appropriate for us to comment further at this time.”

Meanwhile a spokesperson for Novartis said: Novartis did not defend the ACCC case, and has always accepted the ACCC’s concerns relating to the marketing of Voltaren products under the old packaging. We would direct any further questions to GSK Consumer Health, who have been responsible for marketing and selling Voltaren products since 2015.

Drugmakers ‘misled consumers’, rules Federal Court
mybusiness logo
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.

Leave a Comment

Latest poll

How satisfied are you with the SME measures in the federal budget?