Competition panel slaps Rs18-cr penalty on Bengal druggists body

The Competition Commission of India (CCI) has imposed a penalty of Rs18 crore on the Bengal Chemists and Druggist Association (BCDA) for restricting the supply of essential medicines and abusing its dominant position.

The fair trade regulator also directed the BCDA, its office-bearers and executive committee members to ''seize and desist'' from indulging in anti-competitive practices.

The penalty is based on 10 per cent and seven per cent of the average of the turnover / income / receipts of the association in the last three financial years and of the 79 member chemists of the BCDA.

''The commission is of the view that the said anti-competitive acts and conducts require to be penalised to cause deterrence in future among the erring entities engaged in such actions. Accordingly, it is required that the degree of punishment is scaled to the severity of the violation,'' CCI said in its order, adding, ''On this count, the position of BCDA to control the market of drugs and medicines in its area of operation is undoubted.''

Investigations by CCI has established beyond doubt that BCDA and its district and zonal committees are engaged in anti-competitive practices of directly or indirectly determining the sale prices of drugs and controlling or limiting the supply of drugs through concerted and restricted practices in violation of the Act.

The CCI had referred the case for an investigation after it received complaints from some chemists.

The fair trade watchdog had earlier warned the pharma trade against certain anti-competitive practices followed at the national, state and district level associations of chemists, druggists, stockists, wholesalers and manufacturers.

CCI had cautioned against the procedure of issuance of "no objection certificate" or letters of consent by pharma associations for opening chemists shops or for appointment of stockists, distributor or wholesalers.

Trade bodies also influence the fixation of trade margins at different levels of sale of drugs and medicines, which in turn affect pricing policies of the industry.

CCI had 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. (See: CCI warns pharma trade against anti-competitive practices)