UK government sues Reckitt Benckiser for £90 mn

British household goods giant Reckitt Benckiser is being sued for £90 million by health secretary Andrew Lansley, for planning to extract more cash from the National Health Service.

The claim, filed in conjunction with 10 strategic health authorities and 146 primary care trusts relates to the marketing of Gaviscon heartburn treatment by the group. The Office of Fair Trading has also slapped a £10.2-million fine on the company for its anti-competitive practices.

While the Department of Health was expected to initiate action against the company, the size of the claim had not been revealed.

According to legal papers, Reckitt Benckiser stands accused of devising a scheme codenamed "Project Atlas", under which it would withdraw Gaviscon Original Liquid from the NHS prescription list after the expiry of the product's patent.

The company is also alleged to have conspired to delay the publication of the generic name for the treatment, which would have allowed the NHS to purchase cheaper versions.

With the launch of Project Atlas, prescriptions had to be issued for Reckitt's alternative product, Gaviscon Advance Liquid, which still being under patent had no competition from generic versions.

In its ruling the OFT said that Gaviscon Original Liquid was the leading product in the market at the time of withdrawal, it made commerical sense for Reckitt to withdraw it only due to the potential to restrict competition the alternative product offered.

According to the claimants the secret plan meant that the NHS was ''exposed to excess drug costs.''