The makers of Voltaren pain gels have been fined $4.5 million for falsely passing a product off as being more effective in relieving arthritis symptoms.
The Australian Competition and Consumer Commission (ACCC) took GlaxoSmithKline (GSK) and Novartis to court in late 2017, accusing them of misleading consumers in advertising over five years.
The companies marketed Osteo Gel as being more effective than Emulgel in treating pain and inflammation caused by osteoarthritis.
Despite Emulgel being about 33 per cent cheaper in some stores, the two products were essentially the same.
GSK and Novartis admitted they had breached Australian consumer law with their marketing of Osteo Gel between 2012 and 2017.
The parties also agreed on the question of penalties and Federal Court Justice Robert Bromwich today ordered GSK pay a fine of $1.5 million and Novartis pay $3 million.
“Over more than half a decade, this group of companies sought to maximise their sales and thereby profits by artificially boosting the breadth of its product range in three different ways in packaging and online,” Justice Bromwich wrote in his judgment.
This tricked consumers into thinking there were two different products.
“The contravening conduct could have been avoided by making it clear that the active ingredient was the same in the two products marketed for different uses and indeed generally different users,” Justice Bromwich said.
The misleading claims were made on packaging, on the Voltaren website by both GSK and Novartis and on a separate health website.
In 2017, GSK amended the Osteo Gel packaging to state the product used the “same effective formula” as the Emulgel.
In an affidavit, GSK’s head of legal Navaneetha Dilipumakanth apologised for the company’s conduct and admitted it had “fallen short of the standards expected of it under the Australian Consumer Law”.
“That is a candid and appropriate admission and amounts to the right kind of sorry — sorry for engaging in the conduct, not just sorry for being caught out,” Justice Bromwich said.
The ACCC previously mounted a similar case against the makers of Nurofen involving pain products, which resulted in a $6 million penalty.