Statements linking a price increase of Panadol Osteo to its removal from the Pharmaceutical Benefits Scheme were "ambiguous" but not misleading, an investigation by the Australian Competition and Consumer Commission has found.
In December last year, pharmaceutical giant GlaxoSmithKline told its wholesalers it would lift its prices for Panadol Osteo by 50 per cent from January 1.
The hike meant the cost of one box rose to $7.50, if pharmacies passed on the full price rise to consumers.
It followed a government announcement in November that a number of medicines would be removed from the Pharmaceutical Benefits Scheme, if they were also available over-the-counter and cost less than the standard co-payment amount, including paracetamol products.
"The government recently confirmed most OTC [Over The Counter] medicines, including Panadol Osteo, will no longer be available on the PBS from 1st January, 2016," GSK wrote in a letter to pharmaceutical wholesalers and pharmacists in December last year.
"In moving to an OTC business model, GlaxoSmithKline is no longer able to sustain its current pricing of Panadol Osteo. As such, there will be a price increase on Panadol Osteo from 1st January 2016."
At the time Federal Health Minister Sussan Ley slammed GSK, describing its claims as an "attempt to mislead consumers and pharmacists".
She argued that the PBS changes imposed no extra administrative or regulator costs and encouraged the ACCC to investigate.
The ACCC found the comments made by GSK were unlikely to be in contravention of the Australian Consumer Law, however it highlighted significant concerns about the ambiguity of GSK's statement.
"There can be a fine line between an ambiguous statement and a misleading one," said ACCC Chairman Rod Sims.
"GSK's statements about the increase in price of Panadol Osteo did not make clear the reasons for it, leaving open to interpretation whether the delisting of the product from the PBS contributed to the price increase and to what extent."
Mr Sims said businesses needed to be careful not to mislead consumers by linking only one factor, "such as a change to government policy..." when "price increases [were] attributable to a number of factors."
The ACCC found the removal of Panadol Osteo from the PBS was only one of many factors for the price rise, including the entrance into the market of generic paracetamol 665mg products and the effect this had on sales of Panadol Osteo.
In a statement to Fairfax Media, GSK said it welcomed the ACCC's findings, maintaining that it did "not believe the statements were misleading".
"...However we understand the concerns the ACCC raised. GSK takes Australian Consumer Law very seriously and we will heed their advice to be careful in the language we use in any statements we make to customers, and consumers, in the future."
A spokesperson for Ms Ley said the ACCC's investigation supported "the government's decision to stand up for consumers in referring the matter to the ACCC."
