Pharma companies fined over 74 crore

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The Competition Commission of India has imposed a penalty on four pharmaceutical companies and associations, along with their office-bearers, for “stifling competition and controlling supply of drugs in the market”. It imposed a penalty of 55.5 crore on Intas Pharmaceutical Limited, 18.5 crore on Himalaya Drug Company, 4 lakh on Madhya Pradesh Chemists and Druggist Association (MPCDA) and over 39,000 on Indore Chemists Association (ICA) for violating the provisions of the Competition Act, 2002. The allegations were that the associations, through their practice of mandating a ‘No Objection Certificate’ prior to the appointment of stockists, were stifling competition, limiting access of consumers to various pharmaceutical products and controlling the supply of drugs in the market. The Commission, after forming a prima facie opinion, directed the office of Director- General (DG) to conduct an investigation. The investigation established contravention on the part of the said associations and certain pharmaceutical companies, who were found to be facilitating such anti-competitive practices. It also identified certain individuals/ office-bearers/ officials of the associations and pharmaceutical companies to be liable under Section 48 of the Act, said a release issued on Thursday. The Commission imposed a penalty on the associations – 4,18,404 on MPCDA and 39,142 on ICA — in addition to cease and desist directions, issued under Section 27 of the Act,” the release said. Further, taking into account the role played by certain office-bearers of the associations, penalties were also imposed on them, the release added. The Commission, after taking into account the mitigating factors demonstrated by Himalaya Drug Company and Intas Pharmaceutical Limited, imposed on them penalties amounting to 18,59,58,000 and 55,59,68,000 respectively. Penalty was also imposed on certain officials of these companies. “In addition to this, the Commission also directed MPCDA to organise at least five competition awareness and compliance programmes over a period of six months in Madhya Pradesh for its members. It directed ICA to organise one competition awareness programme in Indore district. The Commission further directed Himalaya Drug Company and Intas Pharmaceutical Limited to put in place a Competition Compliance Programme and file compliance report with the Commission,” noted the release. The action was initiated after the Madhya Pradesh Chemists and Distributors Federation approached the Commission alleging contravention of rules by MPCDA and others.

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