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Competition Commission cautions against unfair ways in pharma business

Making efforts to weed out unfair business ways in pharma sector, the Competition Commission has said certain activities such as giving instruction to chemists and druggists to restrict discounts on sale of drugs are anti-competitive in nature.

In recent times, the Competition Commission of India (CCI) has pulled up many chemist and druggist groupings, among others, for indulging in unfair business practices.

The fair trade watchdog has listed out various possible anti-competitive practices in the pharma sector in a public notice issued today. The notice is addressed to general public, chemists, druggists, stockists of medicines, whole-sellers and pharmaceutical manufacturers.

The CCI had found various practices anti-competitive with regard to cases concerning practices of all India, state-level, district-level associations of chemists, druggists, stockists, whole-sellers and manufacturers.

"Issuance of instructions to chemists/druggists/shops/ stockists/whole-sellers/manufacturers restricting discounts on sale of drugs in retail or wholesale," is anti-competitive in nature, the public notice said.

Among others, the regulator has mentioned that issuance of boycott calls by the associations to their members against any enterprise for not following their instructions, and fixation of trade margins at different levels of sale of drugs or medicines, are also against competition norms.

According to the notice, the Commission has already issued cease & desist order against the associations directing them not to indulge in anti-competitive practices and they have filed undertakings that they would not indulge in such illegal practices.

"Non-compliance of the order of this Commission involves severe penalties and can lead to prosecution," it said.

The public notice also said that penalties were imposed on trade associations of chemists and druggists who violated competition rules.

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2/3/2014 9:55:57 AM