OFT raises concerns over opium derivatives

The licensing regime governing opium derivatives could be losing British consumers around ?3 million a year, the Office of Fair Trading (OFT) has said.

Opium derivatives are used in growing range of over the counter medicines, with the market for resulting products worth ?31 million a year. The OFT said, however, that the current licensing system restricts competition and is pushing up prices.

It claimed that MacFarlan Smith Limited (MSL), the dominant supplier of opium derivatives, is able to push up prices and generate high levels of profit in the absence of much competition. British firms are also unable to source the derivatives from abroad, putting them at a disadvantage to their foreign counterparts.

“The current licensing system for the importation of opium derivatives restricts competition to the detriment of British pharmaceutical companies,” said John Fingleton, chief executive of the OFT.

“This drives up costs for organisations such as the NHS, and we want the government to reconsider its policy in the light of our findings so that consumers and businesses get the best deal.”

MSL has promised to ensure that bulk customers are provided with an annual price list, an undertaking made after an investigation by the Monopolies and Mergers Commission in 1989.

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