A price-fixing agreement between drug companies was ruled unlawful yesterday allowing over-the-counter medicines and vitamin supplements to be sold at knock-down prices by supermarkets.

The ruling came from the Restrictive Practices Court where local chemists' representative group, the Community Pharmacy Action Group, dropped its opposition to an Office of Fair Trading action to end the right of drug companies to set minimum prices.

Supermarket workers were said to be working through the night last night to re-price their supplies of branded medicines. As of today, Lemsip at Asda will be 50 per cent cheaper at 90p and Nurofen at Tesco will be £1.26 cheaper at £1.89.

Although supermarket chiefs were predictably overjoyed with the outcome of the court hearing, local pharmacists claimed that many would lose out as smaller chemists closed. Particularly at risk, one said, were the elderly, the disabled and young mothers who often seek advice from their local chemist.