This is excellent news for consumers who will now benefit from lower prices for common household medicines John Vickers, OFT director general

Last October, the Office of Fair Trading (OFT) challenged the so-called resale price maintenance (RPM) in the Restrictive Practices Court arguing that it allowed drug companies to keep the price of branded over-the-counter products artificially high.

John Vickers, director general of the OFT, was delighted by the outcome. "This is excellent news for consumers who will now benefit from lower and more competitive prices for common household medicines," he said.

The Community Pharmacy Action Group (CPAG) had campaigned to keep RPM, claiming its abolition would lead to the closure of 12,000 local pharmacies forced out of business if the supermarkets launch a price-cutting war.

But the court found there was insufficient evidence that a significant number of pharmacies would be shut and ruled RPM was against the public interest.

The news has been condemned as a "devastating blow" to Britain's pharmacies by CPAG's chairman and community chemist, David Sharpe.

"Many pharmacists will simply not be able to survive given the buying power and aggressive pricing tactics of the supermarkets," Mr Sharpe said.

A spokesman for Boots said he was "disappointed" with the court's decision and estimated the move will knock �15m off full year profits. Shares in Boots, the biggest chain of pharmacies in the UK, fell 4.5% on the news.

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