SYDNEY (Reuters) - The Australian subsidiaries of British drugmaker GlaxoSmithKline and Swiss drugmaker Novartis misled customers and broke the law by promoting identical liniments as though they could treat specific ills, an Australian court found on Friday.
The court said the companies admitted marketing Voltaren Osteo Gel as a treatment for osteoarthritis-related pain when its ingredients were the same as a cheaper Voltaren product, Emulgel.
Judge Robert Bromwich said in a written decision that it was part of a “deliberate and considered marketing strategy”.
“Novartis and GSK misled osteoarthritis sufferers into buying the more expensive Osteo Gel thinking that it was more effective,” Sarah Court, commissioner at Australia’s consumer watchdog, which brought the lawsuit, said in a statement.
“This is not the case... Both gels are identical and are equally effective in treating osteoarthritis symptoms and a range of other pain conditions.”
GSK said it had admitted the allegations and that it was pleased Judge Bromwich also found packaging changes since 2017 rectified the breaches of law, something the consumer watchdog had challenged.
“We take consumer law seriously,” GSK’s unit said in a statement.
Novartis marketed and sold the gels until the consumer divisions of Novartis and GSK were combined and eventually acquired by GSK in 2016. Novartis said in a statement it did not defend the case and referred Reuters to GSK.
Judge Bromwich is yet to set a fine but the maximum penalty is the higher of A$10 million ($7 million), triple the benefit earned from the misleading conduct or - if that cannot be determined - a tenth of the annual turnover of the company in question.
Osteo Gel costs about a third more than Emulgel and the claims of its superior effectiveness appeared online and on product packaging between 2012 and 2017.
The ruling follows a 2016 Federal Court decision against Reckitt Benckiser, which was found to have marketed identical pain relief tablets for different types of pain.
Reporting by Tom Westbrook; Editing by Anshuman Daga