CCI investigation points to unfair practices by 3 pharma companies

New Delhi: Three prominent pharmaceutical companies are now under the radar of the Competition Commission of India (CCI) has started an initial investigation on these pharmaceutical companies as well as few regional chemist bodies on account of using unfair trade practice to distribute drugs,

The confirmation to this effect was made by a senior government official to the daily Economic Times.

The official named the three companies- Torrent Pharmaceuticals, Intas Pharmaceuticals and Macleod Pharmaceuticals. The companies are facing allegations of being part of a ploy by some regional trade bodies to appoint their favoured ones as stockists.

This forms as a violation of the Competition Act of 2002.

The CCI, in its initial probe, found that many trade unions were resorting to favouritism while appointing stockists. During the investigation, the commission found that these trade association had issued no objection certificate for the appointment of the stockists in their regions to a few entities they favoured.

Highlighting on the suspected involvement of the pharma companies into this matter, an official explained to

Economic times “Pharma companies are also a part of this unfair practice as they appoint stockists," the official said. "This amounts to stifling the competition in the market by controlling the supply of drugs,” he added

The competition commission has started hearing of the matter and the verdict will be out soon, the official said. After the hearing, the watchdog may also order a further probe. If found guilty, the companies could face penalties.

In 2016, CCI had fined Pharma major Lupin a whooping Rs 82 crores as well as Rs 8,60,321fine on Karnataka Chemists and Druggist Association (KCDA) in a similar matter. The fine came following a detailed investigation by the Commission, the KCDA was found indulging in the anti-competitive practice of mandating NOC (no objection certificate) prior to the appointment of new stockists by pharmaceutical companies, which has the effect of limiting and controlling of the supply of drugs in the market, it said.

Read Also: Competition Commission slaps Rs 72.96 crore penalty on Lupin