The consumer watchdog is taking two pharmaceutical companies to Federal Court over allegations they falsely claimed a painkilling product was capable of targeting specific conditions.
The Australian Competition and Consumer Commission alleges the local divisions of UK firm GlaxoSmithKline and Switzerland's Novartis advertised Voltaren Osteo Gel - which Novartis sold to Glaxo in 2016 - as particularly suitable for osteoarthritis sufferers, despite having the same dose of the same active ingredient as their Emulgel product.
The common ingredient - diclofenac diethylammonium gel - is useful for reducing localised pain and inflammation.
ACCC chairman Rod Sims said Voltaren Osteo Gel has an identical formulation to Emulgel, meaning both products are equally effective in treating osteoarthritis as well as a range of other conditions.
"Consumers are likely to have been misled into purchasing Osteo Gel thinking that it is different to Emulgel and more effective for treating osteoarthritis conditions, when this is not the case," Mr Sims said in a statement on Wednesday.
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"GSK and Novartis engaged in a deliberate commercial strategy to differentiate the products in a way that was likely to mislead consumers."
The consumer watchdog found Voltaren Osteo Gel is often sold at a higher cost than Emulgel.
The ACCC has already taken action against the makers of Nurofen for similar conduct.
In December 2016, the Federal Court ordered Reckitt Benckiser to pay a $6 million penalty for claiming identically formulated ibuprofen products were able to treat particular types of pain.
