§ Lord Monsonasked Her Majesty's Government:
Whether analgesics, antacids, laxatives, antihistamines and similar branded medical products sold through chemists and other outlets are still subject to retail price maintenance and if so, why.
§ The Minister of State, Department of Trade and Industry (Lord Hesketh)The products in question are, I understand, likely to be within the scope of the Restrictive Practices Court's exemption for certain categories of pharmaceutical product from the prohibition on minimum resale price maintenance (RPM). Manufacturers and suppliers of the products would therefore be permitted (although not required) to impose RPM on their products without being in breach of the Resale Prices Act 1976.
In reaching its decision to exempt the relevant products, the court concluded that price competition between retailers arising from the abandonment of RPM would be likely to lead to the closure of some of the smaller retail outlets (especially in urban areas outside shopping centres) and hence to a reduction, for example, in the number of chemists offering prescription services. It also feared that there would be a reduction in the number and variety of goods sold by those retailers still remaining and in their quality of service.
The court can review its decisions on application from the Director General of Fair Trading or from the manufacturers or wholesale suppliers of the goods in question or their representative associations. However, leave for such an application must first be obtained from the court, and may be granted only where there is prima facie evidence of a material change in the relevant circumstances since the court's previous decision. The possibility of making an application in the case of pharmaceutical products is kept under review by the Director General; however, I understand that he has not so far found sufficient evidence of a material change in the circumstances to support an application to reopen the case.