January 08, 2018

Two Gujarat chemist associations fined: CCI


Finding the Chemists and Druggists Association of Baroda (CDAB) and the Federation of Gujarat State Chemists and Druggists Association (Gujarat Federation) to be in contravention of the provisions of the Competition Act, 2002 (Act), on January 5, the Competition Commission of India (CCI) imposed a total penalty of over Rs 12 lakh on both the Gujarat-based chemists’ groupings, CDAB and Gujarat Federation, putting a stop on the unfair trade practices in pharma business.

The CCI made efforts to sensitize the public on unfair ways in the pharma industry and also asked the two associations and their respective office bearers to cease and desist from indulging in anti-competitive practices.

Under the provisions of Section 27 of the Act, the CCI imposed monetary penalties of Rs 1.08 lakh on CDAB and Rs 11.11 lakh on Gujarat Federation, calculated at the rate of 10% of their average income.

Well, that’s not all. The CCI also imposed penalties of Rs 34,048 on CDAB President V T Shah and Rs 62,144 on Gujarat Federation President Jashvant Patel for their anti-competitive practices.

In this regard, the CCI said, "Despite several orders of the Commission proscribing the anti-competitive practices of state and regional chemists and druggists associations in, inter alia, mandating NOC (No Objection Certificate) for appointment of stockists and demanding PIS (product information service) charges prior to launching of new drugs in the market, these associations are continuing to indulge in such practices."

The Finance Ministry then said, "Given the widespread & continuing indulgence in anti-competitive practices, the Competition Commission of India will be keeping a close watch on the conduct by all such entities in various parts of the country and would not hesitate to take action, wherever deemed necessary."

The Ministry concluded, "Considering larger public interest involved in the distribution of drugs/medicines, the Competition Commission deprecates such a conduct & its perpetration in any form by those responsible, be it Associations, Stockists/Distributor/Wholesaler/Retailer & pharmaceutical companies."

The current case is yet another example of how competitive markets and fair-play in the distribution of drugs/medicines are being compromised by the persisting anti-competitive behavior of the chemist and druggist associations at the Regional as well as State level.

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