We see this as a tax on the poor and a tax on the vulnerable

Phil Evans, Consumers' Assn

The Office of Fair Trading, supported by ASDA, Superdrug and the Consumers' Association, says resale price maintenance must end as it keeps prices artificially high.

But the pharmaceutical industry claims that if it was abolished it would mean the death of high street chemists.

Over-the-counter medicines are big business - worth �1.5bn a year.

But they are the only products shops sell where minimum prices charged to consumers are fixed by the manufacturers.

Supermarkets and consumer groups say the 1962 law that allows this, resale price maintenance, must be abolished as it keeps prices artificially high and has led to shoppers paying hundreds of thousands of pounds a year more than they should.

Anti consumer

Phil Evans, senior policy advisor at the Consumers' Association, says it is a ridiculous remnant of old, anti-consumer, price-fixing rules, is a tax on the poor and the vulnerable and has no place in the 21st century.

"Retail price maintenance covers thousands of products and costs consumers hundreds of millions of pounds every year because prices are fixed by manufacturers in their own interest," he said.

"We see this as a tax on the poor and a tax on the vulnerable," Mr Evans said.

Asda's representatives will also be giving evidence during the court hearing, which is expected to last about a month.

Supermarkets would like to sell "cheaper branded products"

The retailer says there is no need for such high prices for most well-known brands of over-the-counter medicines. It says it would like the right to sell cheaper branded products.

However, in the past every time it has tried to cut prices, the drug companies have served injunctions preventing the chain from doing so.

Asda has examples. It says a pack of 16 Anadin extra strength now sells for �2.09, but if price fixing were abolished, within a year it could be just 80p.

Lemsip currently retails for �2.75. Without price fixing, it'd be �1.51. says Asda and as for vitamin supplements a bottle of Centrum 30s costs �4.49, but the supermarket claims it would like the right to sell it for �2.98.

Fighting for survival

But the UK's 12,000 pharmacies say they are fighting for their livelihoods.

Although most of their business centres on NHS prescriptions, they make double the profit on branded over-the-counter products.

They argue that if price-fixing ends, they will lose out to the big supermarkets.

Manchester pharmacist Marshall Gellman says it would be devastating in the long term if resale price maintenance were abolished.

Communities would lose a lifeline, he argues.

That is because dozens of local pharmacies which depend so heavily on the branded products would be unable to stay in business, he said.

It would be the elderly and those encouraged to seek self-treatment rather than go to their GPs, who would suffer, he added.

There is little doubt that the cost of over the counter products would fall if the law was abolished.

It did when price fixing for books, known as the net book agreement, officially ended three years ago.

But the court has to decide whether or not it might be at the expense of local pharmacies and in that sense against the public interest.