CCI warns pharma trade against anti-competitive practices

Fair trade watch dog Competition Commission of India (CCI) has warned pharma trade against certain anti-competitive practices followed at the national, state and district level associations of chemists, druggists, stockists, wholesalers and manufacturers.

CCI has drawn the attention of associations of chemists, druggists, stockists, wholesalers and manufacturers to some of the anti-competitive practices that it has pointed out earlier, which still continue.

CCI had proscribed the procedure of issuance of `no objection certificate' or letter of consent by pharma associations for opening chemist shop or for appointment of stockists, distributor or wholesalers.

Also, pharmaceutical firms and manufacturers still pay PIS charges to associations for release of new drug and new formulation, CCI pointed out.

Trade bodies also influence the fixation of trade margins at different levels of sale of drugs and medicines.

The industry issues instructions to chemists, druggists, shops, stockists, wholesalers and manufacturers restricting discounts on sale of drugs in retail or wholesale.

Chemists associations impose their will on the manufacturer or distributor by issuing boycott calls to their members against any enterprise not following the instructions of associations.

CCI said it has imposed penalties on such trade associations of chemists and druggists for violation of provisions of Competition Act.

CCI had issued cease and desist order against the associations and has directed them not to indulge in anti-competitive practices and the associations have filed undertakings that they would not indulge in such illegal practices.

Non-compliance of the orders of CCI involves severe penalties and can lead to prosecution, the regulator said.

CCI has asked all affected to approach the commission, bringing to its notice violations of the orders, which are available on its website and have been published in leading newspapers on 31 January 2014.