Competition Commission slaps Rs 72.96 crore penalty on Lupin

The Competition Commission of India (CCI) has imposed a penalty of Rs 72.96 crore on pharmaceutical company Lupin and Rs 8,60,321 on Karnataka Chemists and Druggist Association (KCDA) for anti-competitive practices, an official statement said here.

"The Commission imposed a monetary penalty of Rs 8,60,321 calculated at the rate of 10 per cent of the average income of KCDA. It imposed a penalty at the rate of 1 per cent of Lupin's average turnover, amounting to Rs 72.96 crore," a finance ministry statement said.

"In addition, monetary penalties were imposed on the office bearers of KCDA and officials of Lupin at the rate of 10 per cent and 1 per cent of their incomes, respectively," the statement said.

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.

"The Commission also observed that the pharmaceutical companies cooperate with such associations to implement their anti-competitive decisions, thereby becoming equally complicit in the anti-competitive effect of such practice.

"Instead of approaching the Commission, these pharmaceutical companies cooperate with the NOC requirement of the associations, thus becoming perpetrators of such anti-competitive practice," the statement said.

The Commission has held Lupin responsible for its anti-competitive arrangement with KCDA, it said.