Household products giant Reckitt Benckiser has agreed to pay a fine of £10.2m after admitting to abusing its market position for the supply of heartburn drug Gaviscon.
The Office of Fair Trading (OFT) had accused the firm in February of restricting competition in the supply of heartburn medicines to the NHS.
The OFT said the fine had been reduced from £12m.
This reflected Reckitt's admission and early co-operation with the OFT.
The OFT's inquiry followed an investigation by the BBC's Newsnight programme in 2008.
When a branded medicine's patent has expired, a "generic name" is assigned to it.
Patients are then provided with an "open" prescription that lists its generic name. Pharmacies can choose whether to dispense the relevant brand or equivalent but cheaper generic medicines.
The OFT says this choice provides for strong price competition between pharmaceutical suppliers and can result in considerable savings to the NHS.
An OFT statement said: "The OFT's allegation was that Reckitt Benckiser withdrew NHS packs of Gaviscon Original Liquid from the NHS prescription channel after the product's patent had expired but before the publication of the generic name for it, so that more prescriptions would be issued for its alternative product, Gaviscon Advance Liquid.
"Pharmacies that receive prescriptions for Gaviscon Advance Liquid must dispense it, as it is patent protected and there are no generic equivalent medicines."