CCI cracks down on pharma companies for unfair trade practices

The competition commission of India has cracked a whip on the Indian drug manufacturers for encouraging unfair trade practises by colluding with wholesale drug lobbies. The CCI last week has asked drug manufacturers to furnish various documents and details pertaining to the problems of drug stocks, the product information services, their dealing with pharma distributors and reasons for selling drugs at MRP and not at lower prices, and alleged threats, instances of boycott.

The trigger for this has been a compliant filed by few wholesalers, who have alleged anti competitive trade practice carried by All India Organization of Chemists and Druggists (AIOCD) a lobby group of drug wholesalers. In a letter written to pharma companies, which ET has accessed the commission has said that it has the powers to ask for any document and make a Company or Association a party to the main case. Non-compliance to CCI's directions will result in the Commission taking action against the companies.

Fearing stern action by Indian Drug Manufacturers Association or IDMA the lobby group of domestic companies has cancelled all their agreements with AIOCD. "We had entered into an MOU with AIOCD for uniformity and smooth working of trade, but it is sad that we have been accused of unfair trade practice", said Dara Patel, Secretary General IDMA.

However few pharma companies are considering legal relief on this matter. “The MOU's signed between companies and AIOCD are fairly old and cancelling them might have some repercussions with the pharma trade in many states", said the representative of a pharma company who did wish to be quoted due to the sensitivity of the matter.