Counter Point - III: Anti-competitive Practices in Pharmaceutical Sector -Case No C-87/2009/DGIR of Varca Druggist and Chemist against Chemist and Druggists Association,Goa - K.K. Sharma
As done in some of the previous issues of Competition Law Reporter (CLR), continuing with the series on dissenting and separate orders of different members of the Competition Commission of India (Commission) in some of the cases, in
this write up the focus is on an old case filed before erstwhile MRTPC and transferred to the Commission under the scheme, provided under the Competition Act, 2002 (the Act ), to deal with such cases on repeal ofMRTPC Act, 1969 and
commencement of enforcement of the Act w.e.f.May 20,2009. This was followed by similar informations filed before the Commission alleging anticompetitive practices in pharmaceutical distribution and retail sector. Various studies have documented the prevalence of a number of anticompetitive practices in the pharmaceutical sector which are so deeply entrenched that even pharmaceutical
giants have to succumb to them. The reason of successful perpetuation of these anticompetitive practices is that the players responsible for initiation of these practices and their continuation have not only have a wide reach across the
country but are extremely well organised. Interestingly,most of these informations landed before the Commission because of the infighting amongst members of the associations responsible for these practices orwhen one or some of the office bearers of these associations became too domineering with other ordinary members. The author, who as the first Director General of the Commission put the competition
law investigation framework in place and supervised the very first investigations, looks at the different orders passed by the Commission and its members and the way similar issues were handled in other jurisdictions worldwide.
This presentation by Pradeep Mehta was made at the 2014 Global Forum on Competition (27-28 February) during the session on competition issues in the distribution of pharmaceuticals. Find out more at http://www.oecd.org/competition/globalforum
This presentation by Sabine Vogler was made at the 2014 Global Forum on Competition (27-28 February) during the session on competition issues in the distribution of pharmaceuticals. Find out more at http://www.oecd.org/competition/globalforum
Quick Sccess Guide: Top 25 Questions Answered by the New FDA Q&A DraftAngela Carver
Supply chain businesses nationwide are rushing to implement operational changes in order to meet upcoming FDA Drug Supply Chain Security Act deadlines. This process has been a struggle for many due to the complexity of this legislation. Different business types must follow different portions of the rule in regards to reporting, registering and much more. The Food and Drug Administration released a new draft to answer some of the most frequently asked questions from third party logistics and wholesale distribution operations. This report is an update to a previously published 2014 draft. It is the intention of the FDA that these drafts are viewed together. This Q&A supplemental provides clarification based on the most frequently asked questions and comments received after the publication of the Annual Reporting draft guidance.
It is critical to clearly understand how these changes will affect your operation as any error in reporting or filing can result in significant penalties. Take advantage of these detailed tools provided by the FDA to ensure your operation is prepared before reported deadline dates. For more information on technologies to aid in pharmaceutical regulatory compliance contact Datex experts today at marketing@datexcorp.com or 800.933.2839 ext. 243.
This presentation by Adrian Majumdar was made at the 2014 Global Forum on Competition (27-28 February) at the session on competition issues in the distribution of pharmaceuticals. Find out more at http://www.oecd.org/competition/globalforum
This presentation by Farasat Bokhari was made at the 2014 Global Forum on Competition (27-28 February) at the session on competition issues in the distribution of pharmaceuticals. Find out more at http://www.oecd.org/competition/globalforum
Marv Shepherd conducted research exploring whether hospital pharmacies could be a source of diverted drugs. A survey of Texas hospitals found that 25% reported being contacted by "grey market" vendors weekly or daily to purchase pharmaceuticals. Additionally, over 85% of hospitals reported being contacted by such vendors in the last month to sell drugs. While the size of this illicit market is unknown, the findings suggest some hospitals may be unlawfully diverting drugs. Further analysis found no significant associations between vendor contacts and hospital size, ownership, or location. The research indicates opportunistic vendors are actively trying to obtain drugs from some hospitals in Texas.
This presentation by Pradeep Mehta was made at the 2014 Global Forum on Competition (27-28 February) during the session on competition issues in the distribution of pharmaceuticals. Find out more at http://www.oecd.org/competition/globalforum
This presentation by Sabine Vogler was made at the 2014 Global Forum on Competition (27-28 February) during the session on competition issues in the distribution of pharmaceuticals. Find out more at http://www.oecd.org/competition/globalforum
Quick Sccess Guide: Top 25 Questions Answered by the New FDA Q&A DraftAngela Carver
Supply chain businesses nationwide are rushing to implement operational changes in order to meet upcoming FDA Drug Supply Chain Security Act deadlines. This process has been a struggle for many due to the complexity of this legislation. Different business types must follow different portions of the rule in regards to reporting, registering and much more. The Food and Drug Administration released a new draft to answer some of the most frequently asked questions from third party logistics and wholesale distribution operations. This report is an update to a previously published 2014 draft. It is the intention of the FDA that these drafts are viewed together. This Q&A supplemental provides clarification based on the most frequently asked questions and comments received after the publication of the Annual Reporting draft guidance.
It is critical to clearly understand how these changes will affect your operation as any error in reporting or filing can result in significant penalties. Take advantage of these detailed tools provided by the FDA to ensure your operation is prepared before reported deadline dates. For more information on technologies to aid in pharmaceutical regulatory compliance contact Datex experts today at marketing@datexcorp.com or 800.933.2839 ext. 243.
This presentation by Adrian Majumdar was made at the 2014 Global Forum on Competition (27-28 February) at the session on competition issues in the distribution of pharmaceuticals. Find out more at http://www.oecd.org/competition/globalforum
This presentation by Farasat Bokhari was made at the 2014 Global Forum on Competition (27-28 February) at the session on competition issues in the distribution of pharmaceuticals. Find out more at http://www.oecd.org/competition/globalforum
Marv Shepherd conducted research exploring whether hospital pharmacies could be a source of diverted drugs. A survey of Texas hospitals found that 25% reported being contacted by "grey market" vendors weekly or daily to purchase pharmaceuticals. Additionally, over 85% of hospitals reported being contacted by such vendors in the last month to sell drugs. While the size of this illicit market is unknown, the findings suggest some hospitals may be unlawfully diverting drugs. Further analysis found no significant associations between vendor contacts and hospital size, ownership, or location. The research indicates opportunistic vendors are actively trying to obtain drugs from some hospitals in Texas.
The obnoxious practice of drug companies
pharmaceutical, indian, government of India, doctor, doctors, aneek, aneek gupta, dr aneek gupta, unethical practice, DGCI, MOH,
This document discusses the supply chain management of the pharmaceutical industry in Ghana and consumer perceptions of Ernest Chemists Limited as a pharmaceutical provider. It finds that Ernest Chemists Limited has an effective supply chain system that makes medicines available and affordable. However, the emergence of substandard drugs in Ghana is due to issues with distribution and quality standards. The study recommends that the Ghanaian government encourage local drug manufacturing by reducing taxes on ingredients to improve access and healthcare.
Unethical Practices in Pharma - Interesting Study from Pakistan Anup Soans
This study clarifies the current pharmaceutical drug promotion and prescribing practices in Pakistan. The majority of prescribers and national pharmaceutical firms and to some extent the multinational pharmaceuticals are involved in unethical practices in drug promotion and prescribing. Alarming policies governing the drug promotion and prescribing are required to be implemented by the concerned regulatory authorities to avoid unnecessary harm to the patient’s life and pocket through the unethical drug promotion. The prescribers should not accept any incentives, gifts of financial value from any pharmaceutical companies in return for an increase in prescribing selected brand. On the other hand, pharmaceutical companies must compete in the market on the basis of the drug quality and do not offer any valuable gift and incentives to the prescribers. The interaction between doctors and phar- maceutical firms should be restricted within acceptable boundaries and the authorities must be prepared to play an active role. Strengthening the regulatory machinery and formulating policies in this regard in neces- sary. It is essential that a health care professional such as a pharmacist can play an important role in this process since he/she is an expert in the pharmaceutical field as well as more aware of the outcomes of unethical drug prescribing practices such as polypharmacy and adverse drug reactions.
This document provides a market entry strategy for a biosimilar drug called Bevacizumab in China. It summarizes the Chinese oncology drug market, key competitors, regulatory approval process, pricing and reimbursement systems. It also provides a cost analysis and break even calculation for Bevacizumab. The total Chinese cancer drug market is worth $10.5 billion annually and colon cancer represents $1.78 billion of that market. Approval for a new drug takes 18-26 months and involves domestic clinical trials and quality testing. Pricing of oncology drugs is regulated by the government.
The 340B drug pricing program was created in 1992 to provide discounts of up to 50% on prescription drugs to hospitals and clinics that treat low-income patients. However, there is growing concern that the program has strayed from its original goal. Some key issues include hospitals receiving disproportionate discounts relative to the number of low-income patients served, and contract pharmacies distributing drugs to wealthier areas without passing on savings to patients. While the intent of the program was good, its implementation may be enabling unintended consequences like profiting off drug resales rather than helping vulnerable groups as intended. Oversight groups are calling for reforms to better define eligibility and ensure the program benefits those it was designed to help.
This presentation by Aidan Hollis was made at the 2014 Global Forum on Competition (27-28 February) during the session on competition issues in the distribution of pharmaceuticals. Find out more at http://www.oecd.org/competition/globalforum
The National Association of Pharmaceutical Manufacturers (NAPM) was established in 1977 as A Section 21 Trade Association which. It is a voluntary, non-profit organisation consisting of South African and Generics based Pharmaceutical manufacturers and distributors. The NAPM has a diverse membership comprising of 18 companies. Part of the NAPM’s function is to ensure that the sector plays a constructive role in our country’s economic growth, development and transformation and thereby create an environment in which the sector can thrive, expand, be competitive and enhance access of medicines to all of our country’s citizens.
This document summarizes a study conducted by the U.S. Department of Commerce on pharmaceutical price controls in OECD countries and their implications. The key findings are:
1) All 11 OECD countries studied rely on some form of price controls to limit drug spending, resulting in patented drug prices below U.S. levels.
2) Intellectual property rights are adequately enforced in these countries, but price controls still reduce revenues that could support more research and development.
3) Estimates suggest price controls reduce annual global pharmaceutical R&D by $5-8 billion and new drug development by 3-4 drugs per year.
4) Eliminating price controls could provide U.S. consumers $5-
The document discusses the issue of drug diversion, which is defined as the diversion of legally prescribed drugs for illegal purposes. It notes that drug diversion costs the US healthcare system an estimated $72.5 billion per year. Veterinary practices are at risk of drug diversion due to their access and storage of controlled and non-controlled substances. Diversion can occur through various means and at different points in the distribution process. The document outlines regulatory requirements and penalties for diversion violations to emphasize the importance of compliance for veterinary practices.
ACCC 340B Sherer and Guide Article May 2011Matt Sherer
The document provides information about the 340B Drug Pricing Program. It describes the program as originating from legislation in 1992 that limits drug costs for certain healthcare facilities. Safety-net providers can save 20-50% on drug costs by participating. To qualify, a disproportionate share hospital must meet requirements like having an 11.75% DSH percentage and maintaining separate drug inventories for 340B and non-340B patients. The Affordable Care Act expanded eligibility for the program and increased compliance monitoring.
The life sciences industry is a key contributor to the Canadian and global economies. In the pursuit of competitive advantage, participants in the pharmaceutical, biotech, medical device and diagnostic, and health-careservices sectors have seen significant growth attributed to major leaps in technology and an unprecedented demand for health-related goods and services. This growth has paralleled the expansion and imposition of more stringent regulatory requirements, improvement of market access, aggressive patent acquisition and enforcement, strategic M&A activity, and increased product liability claims and other litigation.
This report highlights insights and developments relating to a wide range of legal, business and consumer issues currently impacting the life sciences industry in Canada and abroad. These highlights were prepared by Blakes based on non-confidential information gathered in our practices, as well as through a review of publicly available information. Through
a series of articles, we examine the implications of some of the recent legal developments impacting the sector, including the Supreme Court of Canada’s decision to uphold Ontario’s ban on private-label generic drugs, the enforcement of prohibitions on pharmacy-related loyalty points in B.C., the Competition Bureau’s ongoing consideration of competition among pharmaceutical companies, and recent trends in Canadian litigation. We also discuss issues relating to the navigation of transfer-pricing rules, protecting intellectual property in the development of combination products, and obtaining financing for new product development and business expansion efforts. Supplementing our discussion of these matters are snapshots of consumer-facing and market trends, including integrated patient care and direct-to-consumer sales.
Aware that in the following days the National Legislative Assembly will resume the discussion of the Pharmaceuticals Law draft, the CS seeks to heighten the debate by exposing its position with respect to sector´s competition conditions which was made public in November 2011.
The document analyzes 41 whistleblower complaints against pharmaceutical companies alleging off-label marketing of drugs. It identifies common strategies and practices described in the complaints. The most common strategy was expanding drug use to unapproved disease entities, mentioned in 85% of complaints. Companies allegedly pursued this through prescriber-related marketing practices like presenting favorable drug studies to doctors (76% of complaints) and providing direct financial incentives to physicians (85% of complaints). The document aims to develop a typology of off-label marketing strategies and practices based on analysis of the whistleblower complaints.
Pfizer and Ranbaxy were sued for allegedly engaging in an anticompetitive scheme to delay the entry of generic Lipitor into the market. The plaintiffs claim that Pfizer and Ranbaxy agreed to delay generic Lipitor for 20 months, costing purchasers more than they would have paid for the generic version. As a result of the delayed entry, which was not until November 2011, the plaintiffs and others were forced to pay billions more for Lipitor. Both drug companies were previously sued for similar allegations of holding back the generic version in the US and then fixing its price.
This article discusses audit readiness for hospitals participating in the 340B drug pricing program. It outlines several key areas hospitals should focus on to ensure compliance, including: 1) confirming eligibility requirements for the hospital, patients, and prescribers; 2) developing comprehensive oversight strategies and compliance monitoring programs; and 3) incorporating frequent self-audits and preparing for potential audits from the Health Resources and Services Administration. The article provides tips for audit readiness, such as establishing policies and procedures, updating databases, conducting ongoing education and monitoring, and developing a community benefit plan.
Managed Markets Monday: The Value Challenge in PharmaPALIO
The document discusses the "value challenge" facing the pharmaceutical industry as stakeholders increasingly demand evidence that new drugs provide superior outcomes compared to existing treatments. A survey found divergent views between industry and payers on how to define and demonstrate a drug's value. The power in market influence is shifting from pharmaceutical companies to payers and governments who assess healthcare spending. To better meet the value challenge, companies are pursuing managed markets strategies like sharing more outcomes data and engaging payers earlier in the drug development process.
The document discusses pharmaceutical marketing practices in India and the development of a Uniform Code of Pharmaceutical Marketing Practices (UCPMP). It notes that while the UCPMP aims to standardize ethical practices, some remain skeptical of its effectiveness without strict enforcement. Concerns have been raised about the influence of pharmaceutical company promotions on doctor prescribing habits. The UCPMP framework outlines principles for ethical product promotion, prohibiting gifts to influence prescribing, and requiring transparency around expenditures.
The Indian pharmaceutical industry is growing rapidly but faces challenges in managing its complex supply chain. Drugs are distributed through multiple layers including clearing and forwarding agents, stockists, sub-stockists, and retailers before reaching consumers. This multilayered system makes recalling drugs difficult and increases supply chain costs. Pharmaceutical companies are working to improve supply chain efficiency and ensure quality through initiatives like replenishment-based systems and cold-chain management. Effectively addressing India's fragmented distribution challenges will benefit patients and the healthcare system.
Transitioning a medicine from prescription-only to over-the-counter status is big business—and the Emerging Markets hold the key to sustained growth for OTC marketers. But manufacturers looking at such opportunities for growth have number of questions in mind. This article clarifies many such issues and challenges of the stakeholders and typical segments to encash on.
for more information log on to www.interlinkconsultancy.com
Baby Steps of Competition Law Jurisprudence in Pharmaceutical Sector - K.K. S...KK SHARMA LAW OFFICES
The document summarizes an order by the Competition Appellate Tribunal (COMPAT) regarding appeals in the pharmaceutical sector. The order disposed of multiple appeals related to alleged anti-competitive practices by chemists' associations.
The key issues addressed were requirements for pharmaceutical companies to obtain no-objection certificates or product information service approvals from chemists' associations, as well as fixed trade margins. The appellants argued the investigation conducted by the Director General was flawed and violated principles of natural justice. COMPAT analyzed the relevant sections of the Competition Act and regulations at length before determining the Commission is bound by principles of natural justice in its adjudicatory functions.
The obnoxious practice of drug companies
pharmaceutical, indian, government of India, doctor, doctors, aneek, aneek gupta, dr aneek gupta, unethical practice, DGCI, MOH,
This document discusses the supply chain management of the pharmaceutical industry in Ghana and consumer perceptions of Ernest Chemists Limited as a pharmaceutical provider. It finds that Ernest Chemists Limited has an effective supply chain system that makes medicines available and affordable. However, the emergence of substandard drugs in Ghana is due to issues with distribution and quality standards. The study recommends that the Ghanaian government encourage local drug manufacturing by reducing taxes on ingredients to improve access and healthcare.
Unethical Practices in Pharma - Interesting Study from Pakistan Anup Soans
This study clarifies the current pharmaceutical drug promotion and prescribing practices in Pakistan. The majority of prescribers and national pharmaceutical firms and to some extent the multinational pharmaceuticals are involved in unethical practices in drug promotion and prescribing. Alarming policies governing the drug promotion and prescribing are required to be implemented by the concerned regulatory authorities to avoid unnecessary harm to the patient’s life and pocket through the unethical drug promotion. The prescribers should not accept any incentives, gifts of financial value from any pharmaceutical companies in return for an increase in prescribing selected brand. On the other hand, pharmaceutical companies must compete in the market on the basis of the drug quality and do not offer any valuable gift and incentives to the prescribers. The interaction between doctors and phar- maceutical firms should be restricted within acceptable boundaries and the authorities must be prepared to play an active role. Strengthening the regulatory machinery and formulating policies in this regard in neces- sary. It is essential that a health care professional such as a pharmacist can play an important role in this process since he/she is an expert in the pharmaceutical field as well as more aware of the outcomes of unethical drug prescribing practices such as polypharmacy and adverse drug reactions.
This document provides a market entry strategy for a biosimilar drug called Bevacizumab in China. It summarizes the Chinese oncology drug market, key competitors, regulatory approval process, pricing and reimbursement systems. It also provides a cost analysis and break even calculation for Bevacizumab. The total Chinese cancer drug market is worth $10.5 billion annually and colon cancer represents $1.78 billion of that market. Approval for a new drug takes 18-26 months and involves domestic clinical trials and quality testing. Pricing of oncology drugs is regulated by the government.
The 340B drug pricing program was created in 1992 to provide discounts of up to 50% on prescription drugs to hospitals and clinics that treat low-income patients. However, there is growing concern that the program has strayed from its original goal. Some key issues include hospitals receiving disproportionate discounts relative to the number of low-income patients served, and contract pharmacies distributing drugs to wealthier areas without passing on savings to patients. While the intent of the program was good, its implementation may be enabling unintended consequences like profiting off drug resales rather than helping vulnerable groups as intended. Oversight groups are calling for reforms to better define eligibility and ensure the program benefits those it was designed to help.
This presentation by Aidan Hollis was made at the 2014 Global Forum on Competition (27-28 February) during the session on competition issues in the distribution of pharmaceuticals. Find out more at http://www.oecd.org/competition/globalforum
The National Association of Pharmaceutical Manufacturers (NAPM) was established in 1977 as A Section 21 Trade Association which. It is a voluntary, non-profit organisation consisting of South African and Generics based Pharmaceutical manufacturers and distributors. The NAPM has a diverse membership comprising of 18 companies. Part of the NAPM’s function is to ensure that the sector plays a constructive role in our country’s economic growth, development and transformation and thereby create an environment in which the sector can thrive, expand, be competitive and enhance access of medicines to all of our country’s citizens.
This document summarizes a study conducted by the U.S. Department of Commerce on pharmaceutical price controls in OECD countries and their implications. The key findings are:
1) All 11 OECD countries studied rely on some form of price controls to limit drug spending, resulting in patented drug prices below U.S. levels.
2) Intellectual property rights are adequately enforced in these countries, but price controls still reduce revenues that could support more research and development.
3) Estimates suggest price controls reduce annual global pharmaceutical R&D by $5-8 billion and new drug development by 3-4 drugs per year.
4) Eliminating price controls could provide U.S. consumers $5-
The document discusses the issue of drug diversion, which is defined as the diversion of legally prescribed drugs for illegal purposes. It notes that drug diversion costs the US healthcare system an estimated $72.5 billion per year. Veterinary practices are at risk of drug diversion due to their access and storage of controlled and non-controlled substances. Diversion can occur through various means and at different points in the distribution process. The document outlines regulatory requirements and penalties for diversion violations to emphasize the importance of compliance for veterinary practices.
ACCC 340B Sherer and Guide Article May 2011Matt Sherer
The document provides information about the 340B Drug Pricing Program. It describes the program as originating from legislation in 1992 that limits drug costs for certain healthcare facilities. Safety-net providers can save 20-50% on drug costs by participating. To qualify, a disproportionate share hospital must meet requirements like having an 11.75% DSH percentage and maintaining separate drug inventories for 340B and non-340B patients. The Affordable Care Act expanded eligibility for the program and increased compliance monitoring.
The life sciences industry is a key contributor to the Canadian and global economies. In the pursuit of competitive advantage, participants in the pharmaceutical, biotech, medical device and diagnostic, and health-careservices sectors have seen significant growth attributed to major leaps in technology and an unprecedented demand for health-related goods and services. This growth has paralleled the expansion and imposition of more stringent regulatory requirements, improvement of market access, aggressive patent acquisition and enforcement, strategic M&A activity, and increased product liability claims and other litigation.
This report highlights insights and developments relating to a wide range of legal, business and consumer issues currently impacting the life sciences industry in Canada and abroad. These highlights were prepared by Blakes based on non-confidential information gathered in our practices, as well as through a review of publicly available information. Through
a series of articles, we examine the implications of some of the recent legal developments impacting the sector, including the Supreme Court of Canada’s decision to uphold Ontario’s ban on private-label generic drugs, the enforcement of prohibitions on pharmacy-related loyalty points in B.C., the Competition Bureau’s ongoing consideration of competition among pharmaceutical companies, and recent trends in Canadian litigation. We also discuss issues relating to the navigation of transfer-pricing rules, protecting intellectual property in the development of combination products, and obtaining financing for new product development and business expansion efforts. Supplementing our discussion of these matters are snapshots of consumer-facing and market trends, including integrated patient care and direct-to-consumer sales.
Aware that in the following days the National Legislative Assembly will resume the discussion of the Pharmaceuticals Law draft, the CS seeks to heighten the debate by exposing its position with respect to sector´s competition conditions which was made public in November 2011.
The document analyzes 41 whistleblower complaints against pharmaceutical companies alleging off-label marketing of drugs. It identifies common strategies and practices described in the complaints. The most common strategy was expanding drug use to unapproved disease entities, mentioned in 85% of complaints. Companies allegedly pursued this through prescriber-related marketing practices like presenting favorable drug studies to doctors (76% of complaints) and providing direct financial incentives to physicians (85% of complaints). The document aims to develop a typology of off-label marketing strategies and practices based on analysis of the whistleblower complaints.
Pfizer and Ranbaxy were sued for allegedly engaging in an anticompetitive scheme to delay the entry of generic Lipitor into the market. The plaintiffs claim that Pfizer and Ranbaxy agreed to delay generic Lipitor for 20 months, costing purchasers more than they would have paid for the generic version. As a result of the delayed entry, which was not until November 2011, the plaintiffs and others were forced to pay billions more for Lipitor. Both drug companies were previously sued for similar allegations of holding back the generic version in the US and then fixing its price.
This article discusses audit readiness for hospitals participating in the 340B drug pricing program. It outlines several key areas hospitals should focus on to ensure compliance, including: 1) confirming eligibility requirements for the hospital, patients, and prescribers; 2) developing comprehensive oversight strategies and compliance monitoring programs; and 3) incorporating frequent self-audits and preparing for potential audits from the Health Resources and Services Administration. The article provides tips for audit readiness, such as establishing policies and procedures, updating databases, conducting ongoing education and monitoring, and developing a community benefit plan.
Managed Markets Monday: The Value Challenge in PharmaPALIO
The document discusses the "value challenge" facing the pharmaceutical industry as stakeholders increasingly demand evidence that new drugs provide superior outcomes compared to existing treatments. A survey found divergent views between industry and payers on how to define and demonstrate a drug's value. The power in market influence is shifting from pharmaceutical companies to payers and governments who assess healthcare spending. To better meet the value challenge, companies are pursuing managed markets strategies like sharing more outcomes data and engaging payers earlier in the drug development process.
Similar to Counter Point - III: Anti-competitive Practices in Pharmaceutical Sector -Case No C-87/2009/DGIR of Varca Druggist and Chemist against Chemist and Druggists Association,Goa - K.K. Sharma
The document discusses pharmaceutical marketing practices in India and the development of a Uniform Code of Pharmaceutical Marketing Practices (UCPMP). It notes that while the UCPMP aims to standardize ethical practices, some remain skeptical of its effectiveness without strict enforcement. Concerns have been raised about the influence of pharmaceutical company promotions on doctor prescribing habits. The UCPMP framework outlines principles for ethical product promotion, prohibiting gifts to influence prescribing, and requiring transparency around expenditures.
The Indian pharmaceutical industry is growing rapidly but faces challenges in managing its complex supply chain. Drugs are distributed through multiple layers including clearing and forwarding agents, stockists, sub-stockists, and retailers before reaching consumers. This multilayered system makes recalling drugs difficult and increases supply chain costs. Pharmaceutical companies are working to improve supply chain efficiency and ensure quality through initiatives like replenishment-based systems and cold-chain management. Effectively addressing India's fragmented distribution challenges will benefit patients and the healthcare system.
Transitioning a medicine from prescription-only to over-the-counter status is big business—and the Emerging Markets hold the key to sustained growth for OTC marketers. But manufacturers looking at such opportunities for growth have number of questions in mind. This article clarifies many such issues and challenges of the stakeholders and typical segments to encash on.
for more information log on to www.interlinkconsultancy.com
Baby Steps of Competition Law Jurisprudence in Pharmaceutical Sector - K.K. S...KK SHARMA LAW OFFICES
The document summarizes an order by the Competition Appellate Tribunal (COMPAT) regarding appeals in the pharmaceutical sector. The order disposed of multiple appeals related to alleged anti-competitive practices by chemists' associations.
The key issues addressed were requirements for pharmaceutical companies to obtain no-objection certificates or product information service approvals from chemists' associations, as well as fixed trade margins. The appellants argued the investigation conducted by the Director General was flawed and violated principles of natural justice. COMPAT analyzed the relevant sections of the Competition Act and regulations at length before determining the Commission is bound by principles of natural justice in its adjudicatory functions.
Conceptual paper on Study of FMCG & Pharmaceutical Market: Identifying the Di...inventionjournals
With the growing pace of Pharmaceutical market FMCG players are interested to extend their portfolio to tap the market share. Although strict regulatory norms and medico knowledge is the hindrance in their path. On the other hand strong supply chain network of FMCG Industry makes the things easy for them and on which pharmaceutical players are having keen eye. Under this environment both Industrialist and academicians are interested to explore the crossroads where both FMCG and Pharmaceutical Market intercepts. This manuscript is intended to explore that area and study the possible similarities and differences in both the markets so that effective business models could be developed.Work is primarily based on secondary data collected through various reports, journals, e-papers and online repositories. For the sake of avoiding any obsolete data articles has been considered since 2006-2016 only (last 10 years). Comparative analysis has been made on the selected postulates after critical thinking. Appropriate conclusion has been drawn which has relevant implications for FMCG & Pharma players, Policy makers, Management students, Researchers in the concerned areas and the related Entrepreneurs
NAPM is a Section 21 Trade Association which was established in 1977. It is a voluntary, non-profit organisation consisting of South African and Generics based Pharmaceutical manufacturers and distributors. NAPM has a diverse membership comprising of 24 companies. Some of the NAPM’s function is to ensure that the sector plays a constructive role in our country’s economic growth, development and transformation and thereby create an environment in which the sector can thrive, expand, be competitive and enhance access of medicines to all of our country’s citizens.
Survey report pharmaceutical marketing ethical and responsible conductbrandsynapse
The survey found that over 50% of respondents believe that guidelines from the Medical Council of India and Department of Pharmaceuticals on interactions between pharmaceutical companies and healthcare professionals will not be effective in ensuring ethical marketing of drugs in India due to a lack of legislative support and potential for manipulation. Additionally, around 72% felt that the Medical Council was not strongly enforcing its own ethics guidelines. Only 36% believed the Medical Council's guidelines would impact drug sales.
M/s santuka associate pvt ltd vs AIOCD & ors Bindu Kshtriya
This case involved allegations by Santuka Associates Pvt Ltd against All India Organisation of Chemists and Druggists (AIOCD) of engaging in anti-competitive practices. Specifically, AIOCD was alleged to impose unfair conditions like requiring no-objection certificates and product information service approvals on stockists and distributors. It also allegedly issued threats of boycotts. The Competition Commission of India found that AIOCD abused its dominant position by restricting market supply and limiting competition through these practices, in violation of Section 3 of the Competition Act. It imposed a penalty on AIOCD and ordered it to cease such anti-competitive behaviors.
To compare filing process of NDA of different countries of India, US and Euro...Aakashdeep Raval
To compare filing process of NDA of different countries of India, US and Europe.
B) Preparation of global list documents of registration of IND and NDA as per USFDA and Europe.
1) The FDA is implementing new regulations in December 2006 requiring pharmaceutical distributors to track drug pedigrees electronically from manufacturer to pharmacy.
2) RFID is proposed as a solution to help the pharmaceutical industry comply with these regulations in a cost effective way by leveraging existing EPCglobal standards and systems.
3) Training industry stakeholders on RFID technology through an online e-learning program can help ensure successful and fast implementation before the deadline.
Gurumurthy Kalyanaram on Endogenous Modeling of DTCA in IJHPM. Dr. Gurumurthy Kalyanaramh as lectured in various universities including The London School of Economics, The University of Texas at Dallas (UTD), Jiang Xi University of Finance and Frankfurt School of Finance and Management.
The document discusses regulatory requirements for clinical trials and new drug approval. It outlines the importance of laws and regulations in drug development based on past tragedies. Key events that led to stricter regulations are described, such as the Elixir Sulfanilamide mass poisoning in 1937 and the thalidomide birth defect crisis in the 1960s. The roles and responsibilities of regulatory authorities, pharmaceutical companies, and regulatory affairs departments are explained in relation to bringing a new drug safely to market. Clinical trial phases and requirements for Investigational New Drug applications to the FDA are summarized.
The document discusses regulations around online pharmacy services. It notes that while online pharmacies provide convenience, regulatory authorities have concerns about safety due to illegitimate sites that dispense drugs without prescriptions or provide low quality drugs. The document outlines various regulatory approaches taken around the world to address this, including laws, international agreements, accreditation programs, and restrictions on online sales of controlled substances. The goal of regulations is to protect public health by distinguishing between legal and illegal online pharmacies.
A Study of Regulation in Pharmacy Market in Cambodia ( Apply OECD Checklist)Sievleang Ly
- Regulations in Cambodia govern the pharmacy market, restricting ownership, location, and advertising. Qualification requirements aim to ensure trust but limit suppliers. Location rules establish local monopolies and barriers to entry that reduce competition.
- Removing some restrictions could increase supply and competition but may compromise quality. Adding price controls for extra pharmacies could encourage rural access while preventing monopoly abuse. Controlled advertising may benefit consumers through information while maintaining ethics. A balanced approach is needed.
Report on pharmacist perception in India - part 1brandsynapse
This document summarizes the results of a large quantitative study conducted in India on consumer perceptions, availability, role, and expectations of pharmacists. Over 3000 respondents across 4 major cities completed a validated 30-question survey. Key findings include:
1) Most respondents said they could access a pharmacy/medical store in their locality, with 39% having more than one nearby.
2) Common ways of identifying a pharmacy included signboards (31% in Bangalore) and displays of medicines (recognized more by less educated respondents).
3) Perceptions of pharmacists' professionalism varied, with 26% seeing them as primarily traders. However, expectations of pharmacists providing health information and advice were also high.
The document discusses purchasing medicines for hospitals in the UK. It summarizes the key processes and regulations around contracting with pharmaceutical suppliers to obtain medicines. These include the Pharmaceutical Price Regulation Scheme that controls drug prices for the NHS, requirements of EU directives regarding public procurement, and the types of contracts used including commitment and framework agreements. Standard purchasing groups aggregate hospital demand across geographical regions. Specialists are involved in evaluation and quality control.
The document discusses the dark and unethical practices of the pharmaceutical industry. It notes that corruption is endemic at every step of the pharmaceutical business according to the WHO. Unethical marketing practices are used to increase profits by raising customer demand. Doctors and pharmacists face conflicts of interest as their earnings depend on drug sales. Technical solutions have been proposed like reforming drug approval and increasing regulatory independence, but the industry opposes changes due to its political influence.
Medicines and Healthcare products Regulatory Agency(MHRA)TMU
What are regulatory bodies:- In the present scenario, pharmaceuticals are considered as the most highly regulated industries worldwide. The regulatory body ensures compliances in various legal and regulatory aspects of a drug. Every country has its own regulatory authority, which is responsible to enforce the rules and regulations and issue the guidelines to regulate drug development process, licensing, registration, manufacturing. marketing and labeling of pharmaceutical products like:
USFDA(USA)
MHRA(UK)
TGA(Australia
AIMS:- Protecting public health through regulation, with acceptablebenefit-risk profiles for medicines and devices.
Promoting public health by helping people who use these productsto understand their benefits and risks.
Improving public health by encouraging and facilitating developments in products that will benefit people
GUIDELINES:- Guidelines for Manufacturers on Clinical Investigations to be carried out in the UK.
Inspected UK Contract GMP Quality Control Laboratories.
BLUE GUIDE: Advertising and Promotion of medicines in the UK.
ORANGE GUIDE: Rules and Guidelines for Pharmaceutical Manufacturers and Distributors.
Good Pharmacovigilance Practice Guide.
Guidelines on Process Validation
Guide to UK GLP Regulations 1999
Recommendations on the control and monitoring of storage and transportation temperatures of medicinal products.
Guide to defective medicinal products.
Introduction of a Risk Based Inspection Programme for GMP Labs.
SALIENT FEATURES, COMMITTEES/WORKING GROUPS:-
MHRA has the power to withdraw a product from market and suspend production of medicines.
A manufacturer or distributor can be prosecuted if the law has been broken.
Regulatory decisions are impartial D Different products are treated differently.
MHRA collaborates with :
US Food and Drug Administration
NPSA National Patient Safety Agency
NICE National Institute for Health and Clinical Excellence
This document discusses the role and importance of regulatory affairs professionals in the pharmaceutical industry. It notes that regulatory affairs professionals ensure companies comply with relevant laws and regulations, advise on regulatory strategies and requirements, and facilitate the approval and marketing of drugs by communicating with regulatory agencies. Their work is important for developing innovative products and accelerating time to market while ensuring safety, efficacy and compliance.
Similar to Counter Point - III: Anti-competitive Practices in Pharmaceutical Sector -Case No C-87/2009/DGIR of Varca Druggist and Chemist against Chemist and Druggists Association,Goa - K.K. Sharma (20)
India: Prohibition of Anti-Competitive Agreements and Abuse of Dominant PositionKK SHARMA LAW OFFICES
“Unlike the time when recall value of competition was associated only with examinations or sports, the awareness about competition law has come a long way when almost every other day CCI is in the news for reprimanding the erring
market players. Fines for anti-competitive conduct are huge as seen in cases such as that of DLF and cement companies. Having completed a little over four years of active enforcement and nearly ten years of advocacy, CCI has carved a niche for
itself. The author, Mr. K K Sharma, Chairman, KK Sharma Law Offices and former Director General, CCI, having the rare privilege of both drafting and implementing the law as well as being at the cutting edge by way of sculpting the
very first investigations and heading Merger Control and Anti-trust Divisions looks back and sums up the four years of cartel enforcement in India in this article.“
Economies (Efficiencies) – An Essential Consideration in Merger AnalysisKK SHARMA LAW OFFICES
The document discusses the evolving consideration of efficiencies (economies) in merger analysis under competition law. It notes that while competition law aims to preserve competition, the essential objective is efficient market outcomes. Most jurisdictions now accept efficiencies as a justification for approving mergers. However, quantifying and weighing efficiencies can be complex. The document examines how the US, Canada, and Australia incorporate efficiencies in their merger analysis, representing three approaches: as part of substantive assessment, as a defense, and through authorization. It concludes there is need for transitional economies like India to recognize efficiencies in competition law and policy.
“ India recently completed a little over two years of regulation of combinations.
In contrast to the exaggerated fears associated with the likely bringing into force
of the provisions relating to regulation of combinations before the provisions
were actually notified w.e.f. June 1, 2011, the two years have passed rather
peacefully. The author , Mr. K K Sharma, former Head of Merger Control and
Director General, CCI, who laid the foundations of regulation of combinations
in India by way of devising the Merger Review Format as well as making it
successfully functional , reviews the performance of Competition Commission of
India in regulation of combinations and discusses the associated issues. He also
throws light on merger filing Form 1 which is almost the simplest in the world
for a jurisdiction having almost the highest thresholds in the world. He places on
record the deft handling of the regulation of combinations by CCI.”
This document discusses some areas for potential improvement in the functioning of the Competition Commission of India (CCI). It notes that over 7 years, the CCI has not grown as effectively as expected given the size of India's economy and prevalence of anticompetitive practices. The document discusses three key areas - institutionalizing institutional memory to avoid repeating work, improving how information from informants is dealt with to protect identities and encourage more cases, and making greater use of sua sponte investigations instead of just reacting to cases. Maintaining proper records and knowledge management could help the CCI function more effectively.
Some Thoughts for CCI-II: Participatory Competition Law EnforcementKK SHARMA LAW OFFICES
Carrying forward, the theme of an earlier article, the author looks at the authorised
representation before the Competition Commission of India (‘Commission’) and
whether it continues the way it was envisaged in the Act or tilting in favour of
any particular profession. He also examines the newly started practice of the
Commission calling the opposite parties during the preliminary hearings with
the informant to fully understand the matter. There were certain amendments
introduced to the Competition Act, 2002(‘Act’) in September, 2007. The issue
being examined in this article also includes the point if this practice is compatible
with the amendments of 2007 to the Act.
The author who not only was closely involved in amendments of 2007, drafting
regulations for the functioning of the Commission and headed the Antitrust
Division of CCI but was also the first Director General of the functional
Commission discusses the compatibility of this new practice with the probability
of success of investigation process in this article.
Counter Point - V: First Economic Study in DG Report to examine two models of...KK SHARMA LAW OFFICES
Ever since the time when the powers of enforcement were conferred on the
Competition Commission of India (CCI) in May, 2009, there has been a
continuous evolution of the competition law in the country in the form of decisions
of the CCI in various informations brought before it. Amongst various cases
before it, the case No. 3 of 2009, one of the very first cases before the CCI was
interesting from many angles. First of all, this was the first instance where the
help of economic anlysis was taken by Director General (DG), in his report to
arrive a t his findings. Secondly, it was a case where, three associations of travel
agents were actively involved in boycott of an airlines wheres the other three
associations were not actively involved in the boycott but their names were used
by the remaining three associations in the agitation. The ‘not active’ associations
had also not hauled by the three ‘active’ associations for use of their name in their
hoardings but had also not contributed towards the funding of the agitations
without any visible resistance from the ‘not active’ associations.
The author who supervised the preparation of the report of the DG for the Commission
also introduced economic analysis in this case for the first time as the very first
Director General of the functional Competition Commission of India looks back at
the case and the dissenting orders passed by two Members of the CCI
Counter Point - III: Anti-competitive Practices in Pharmaceutical Sector- Cas...KK SHARMA LAW OFFICES
As done in some of the previous issues of Competition Law Reporter (CLR),
continuing with the series on dissenting and separate orders of different members
of the Competition Commission of India (Commission) in some of the cases, in
this write up the focus is on an old case filed before erstwhile MRTPC and
transferred to the Commission under the scheme, provided under the Competition
Act, 2002 (the Act ), to deal with such cases on repeal of MRTPC Act, 1969 and
commencement of enforcement of the Act w.e.f. May 20,2009. This was followed
by similar informations filed before the Commission alleging anticompetitive
practices in pharmaceutical distribution and retail sector. Various studies have
documented the prevalence of a number of anticompetitive practices in the
pharmaceutical sector which are so deeply entrenched that even pharmaceutical
giants have to succumb to them. The reason of successful perpetuation of these
anticompetitive practices is that the players responsible for initiation of these
practices and their continuation have not only have a wide reach across the
country but are extremely well organised. Interestingly, most of these informations
landed before the Commission because of the infighting amongst members of the
associations responsible for these practices or when one or some of the office bearers
of these associations became too domineering with other ordinary members. The
author, who as the first Director General of the Commission put the competition
law investigation framework in place and supervised the very first investigations,
looks at the different orders passed by the Commission and its members and the
way similar issues were handled in other jurisdictions worldwide.
Way back in September, 2007, the Competition Act, 2002 (the Act) was amended
by the Competition (Amendment ) Act, 2007 ( the Amendment Act). This had
become necessary on account of numerous legal challenges to the implementation
the competition law in India despite the enactment of the Act in January, 2003.
These amendments added an altogether new chapter creating a new appellate
structure in between the decisions of the Competition Commission of India (the
Commission) and the Supreme Court which was not existing in the original Act
as enacted in January, 2003. Thus came into existence a new body known as the
Competition Appellate Tribunal (COMPAT). In addition to this amendment,
the Amendment Act also made many significant amendments to the Act. One
such amendment was replacement of the word ‘complaint’ with ‘ information’ in
section 19 of the Act. This write up limits itself to looking only at this amendment
to section 19 of the Act.
The author who assisted the Commission in drafting the regulations for various
aspects of the functioning of the Commission and headed the Antitrust Division
of CCI to actually implement these regulations in real practice and also was the
first Director General of the functional Competition Commission of India
examines the implication of this amenmdment in this article.
Compared to the other enforcement provisions of the Act, the merger control
provisions, or regulation of combinations as these are called in India, are of more
recent origin. The regulations drafted by the Competition Commission of India
(the Commission) for regulation of the combinations, in an attempt to make the
combination regulations more business friendly, have given a window of not filing
the merger filings before the Commission in some cases of combinations where the
possibilities of the Appreciable Adverse Effect on Combination (AAEC) are lesser.
The question arises as to how to deal with the instances where the parties do not file
the details of any combination and the Commission is of the opinion that the
combination either causes or is likely to cause an AAEC in the relevant market.
The author, who was the architect of the introduction of schedule 1 for the
exempt type categories while drafting the combination regulations for India as
the first Head of Merger Control in India and thus making regulation of
combinations a reality in India, delves deep into the issue and looks at the possible
solutions. In his view, the Commission still has freedom to act against any
combination causing AAEC – whether above or below thresholds.
The Competition (Amendment ) Bill, 2012, Bill No. 136 of 2012 ( the Amendment
Bill 2012) lapsed before it could become a law because of the dissolution of the then
lower house of Parliament just before the general elections leading to the present
Government, at the centre, came to power. One of the amendments, proposed in
this Amendment Bill 2012, sought to make changes in Section 26 of the Act to
allow some clear lee way to the Competition Commission of India (Commission) to
differ from the report of the Director General(DG) and close the matter despite the
DG having come to the conclusion that there is a violation of competition law
after he has investigated into the allegations of violations of competition law. Such
clarity, sought to be introduced by the Amendment Bill, 2012, is missing in the
relevant provisions of the Act as they stand today. In the appropriate provisions, as
they exist today, there is enough room for inquiry by the Commission in addition
to the investigation by the Director General(DG) after investigation by DG is
done. The natural corrollary is that a poorly investigated report by DG can not be
either a basis or excuse for not upholding violations of competition law if found in
a prima facie opinion of the Commission. However, it is a moot point if this part of
the mandate is being fully exercised at present or not.
It is this part of inquiry by the Commission after the report has been submitted by
the DG which the author, who headed the Antitrust Division of CCI to actually
see the implementation of functional regulations in real practice and also assisted
the Commission in drafting these regulations, discusses in this article.
The Competition Commission of India(CCI) had imposed a penalty of Rs. 672 Crores, cumulatively, on four public sector general insurance companies. All the four companies preferred an appeal before the Competition Appellate Tribunal
(COMPAT). In its appellate order, the COMPAT did not disagree with CCI as far as the applicability of penalty was concerned but reduced the quantum by Rs. 670 Crores.
The write up discusses ONLY the factual aspects of the case, strictly for academic purposes, WITHOUT airing any personal opinions on the issue. This is being done on account of the fact of the author being professionally involved in the matter.
Some Thoughts for CCI-II : Participatory Competition Law Enforcement - K K Sh...KK SHARMA LAW OFFICES
Carrying forward , the theme of an earlier article, the author looks at the authorised representation before the Competition Commission of India (‘Commission’) and whether it continues the way it was envisaged in the Act or tilting in favour of any particular profession. He also examines the newly started practice of the Commission calling the opposite parties during the preliminary hearings with the informant to fully understand thae matter. There were certain amendments introduced to the Competition Act, 2002(‘Act’) in September, 2007. The issue being examined in this article also includes the point if this practice is compatible with the amendments of 2007 to the Act.
The author who not only was closely involved in amendments of 2007, drafting regulations for the functioning of the Commission and headed the Antitrust Division of CCI but was also the first Director General of the functional Commissiondiscusses the compatibility of this new practice with the probability of success of investigation process in this article.
Economies (Efficiencies) – An Essential Consideration in Merger Analysis - KK...KK SHARMA LAW OFFICES
While the purport of competition law is to preserve and promote competition, the
essential object of competition is to ensure optimal allocation of available resources,
produce more while using less resources and thus, achieve efficient market
outcomes. Generally, the efficiency is accepted as a defence in competition law.
Ignorance of economies (efficient use of resources) by competition law and
competition enforcement agencies would prejudice the very object of preserving
competition. However, one should also acknowledge that scientific quantification and weighing of efficiencies are complex tasks.
Reality Bites: A Review of Penal Provisions under the Competition LawKK SHARMA LAW OFFICES
Despite being a new law in its own right, the Competition Act, 2002 (the Act)
is still perceived as a successor to the Monopolies and Restrictive practices Act,
1969 (MRTPC Act). There is a need for a better appreciation that, unlike MRTPC,
the CCI has adequate powers to deal with the delinquent enterprises, to ensure
that it is in a position to effectively fulfill the mandate given to it. Through a
discussion of the penal provisions of the Act, the author, who played a pioneering
role in establishing the CCI, sets the record straight about the adequate penal
powers given to the CCI to be in a position to be an effective regulator by making
a comparison between the earlier MRTPC regime and, after its repeal, the present
competition regime under CCI. On comparison, the author feels that the CCI
has adequate powers to deal with the responsibility entrusted to it.
Combination Review in India: Lessons So Far - Part II - KK SharmaKK SHARMA LAW OFFICES
In the immediately preceding issue, the performance of the CCI in the task of
regulations of combinations, as compared to international standards, was discussed
and found to be really impressive for any new competition agency. However, this
experience in regulation of combinations has thrown up interesting lessons in
merger control. In this concluding part, the author, who laid down the basic
analytical and procedural framework for combination review, as the first Head of
Merger Control CCI, in India, takes a look at the lessons from the journey in
merger control so far in India. The comparisons with other jurisdictions throw
up extremely interesting results as seen here in this concluding part.
Combination Review in India: A Mid-year Review (Part I) - K.K. SharmaKK SHARMA LAW OFFICES
In this two-part article, the first part of which appears here, the author, the chief
architect behind the review format of Merger Review in India, takes a look at the
performance of the Competition Commission of India (CCI) in handling the
regulations of combinations (merger review) in India and how does it compare
with international standards. The stark contrast between the anxious reactions
before the regulations of combinations came into force and the deafening silence,
even after 19 approvals have been given by the CCI, has also been briefly touched
upon. The next part, to follow, shall deal with the lessons arising from the
journey of merger control in India so far.
Automobile Manufacturers Fined for Restricting Access to Replacement Parts - ...KK SHARMA LAW OFFICES
Competition Law and Intellectual Property Rights (IPRs), since ages, have had a difficult marriage. As is popularly believed that a happy, successful and enduring marriage, between spouses, is good for the growth, stability and future development of the children, nearly in a similar way, it is necessary for this marriage between competition law and IPRs for the overall and long-term benefit of the society. IPRs are statutorily given monopolies and these are given for good reasons to induce inventions and other creative outcomes from some gifted members of the society to be revealed to the society at large so that , in exchange for granting of short term monopoly to the contributor of the IPRs, the society is revealed the new inventions and creations which become publicly available after the lapse of statutorily granted monopoly time period. During the period during the grant of these statutorily allowed monopolies, the holder of IPRs is permitted reasonable protection under competition law as well. The order in automobiles spare parts’ case passed by CCI on the question of reasonableness is an important landmark in this area of jurisprudence of IPRs and competition law. The author, who as the first Director General of functional Competition Commission of India, established the competition law investigation framework in India, looks back at this order of CCI in this piece.
Importance of Being a Member of CCI : Order in Jypee Case --K K Sharma KK SHARMA LAW OFFICES
Recently, the Competition Commission of India(Commission or CCI) came up with, perhaps, its first very closly contested order wherein a majority of 3 members held that the Jaypee Group was not in a dominant position in the relevant market of ‘residential units’ in Noida and Greater Noida and , therefore, was not to be imposed any penalty upon for abuse of dominant position. On the other hand, a minority of 2 Members imposed a penalty of Rs. 666 crores on the group for abusing its dominant position in the relevant market of ‘integrated townships’ in Noida and Greater Noida.This was a case wherein the DG was asked to submit a supplementary report after carrying out further investigations. The DG submitted his supplementary report which substantially differed from the earlier finding by the DG as far as the dominant position was considered. It was this aspect of the matter which dramatically changed the contours of the case. After the new recommendations of the DG pointed to considerably changed position and held Jaypee group to be dominant in the newly defined relevant market as suggested by the Commission, the majority opinion differed from this new finding and went back to the earlier finding of DG and thus not imposing penalty on the group but the minority went ahead and imposed a penalty. The author who headed the Antitrust Division of CCI , when now well known case of DLF was being examined within CCI, and was the first Director General of the functional Competition Commission of India and made the architecture for the competition law investigation in the country looks at this interesting order in this write up.
A 360 Degree Review of Penal Provisions’ Application under Competition Law ...KK SHARMA LAW OFFICES
Perhaps not many laws have been subject to so much public scrutiny as competition law either before its enactment or afterwards. Almost immediately after its enactment, just after a duly appointed Member had assumed office and before a duly appointed Chairman could enter office, the Competition Act, 2002(Act) was challenged on various counts. This resulted in a very strange situation. The Competition Commission of India (CCI) could not be called a Commission in terms of the Act which needed a minimum quorum of a Chairman and, at least, two Members for being a legally recognized Commission. So, the CCI remained a one Member body (not a full Commission) till as late as March 1, 2009 when, for the first time, a Chairman and two Members were in office and the CCI, in the eyes of law, was a full Commission. The enforcement powers to CCI came in stages. In first phase only advocacy functions were allowed. This was followed by antitrust enforcement powers being given to the Commission from May 20, 2009. Thereafter, regulations of combinations (popularly known as Merger Review) came into force with effect from June 1, 2011. There were always fears that the CCI may turn out to be as effective (or ineffective depending upon one’s perspective) as MRTPC. Now, that five years have passed since the time the CCI began to get its enforcement powers, it is high time to look back if the fears about the efficacy of the powers given to the CCI were justified or misplaced. The author, the only official in senior echelons of the CCI who not only saw the transition from a CCI doing only competition advocacy to a fully functional Commission but also played a very crucial role in this transition by way of being the very first Director General of the functional CCI, laying down the investigative framework of investigation, and later as the first head of Merger Control who gave the country its very efficient Merger Review Format, takes a look at this issue.
Ex-Parte Prima Facie order by the Competition Commission of India – A CritiqueKK SHARMA LAW OFFICES
Prima facie view or opinion as to existence or absence of a case by the Competition
Commission of India is an extremely crucial decision. Affirmative decision as to
existence of an anti competitive/abusive practice triggers a full fledged Inquiry.
Likewise, a prima facie view that there is no case of infringement of provisions of
Competition Act results in dropping of further proceedings. It is significant for
parties involved.
सुप्रीम कोर्ट ने यह भी माना था कि मजिस्ट्रेट का यह कर्तव्य है कि वह सुनिश्चित करे कि अधिकारी पीएमएलए के तहत निर्धारित प्रक्रिया के साथ-साथ संवैधानिक सुरक्षा उपायों का भी उचित रूप से पालन करें।
Lifting the Corporate Veil. Power Point Presentationseri bangash
"Lifting the Corporate Veil" is a legal concept that refers to the judicial act of disregarding the separate legal personality of a corporation or limited liability company (LLC). Normally, a corporation is considered a legal entity separate from its shareholders or members, meaning that the personal assets of shareholders or members are protected from the liabilities of the corporation. However, there are certain situations where courts may decide to "pierce" or "lift" the corporate veil, holding shareholders or members personally liable for the debts or actions of the corporation.
Here are some common scenarios in which courts might lift the corporate veil:
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Failure to Observe Corporate Formalities: Corporations and LLCs are required to observe certain formalities, such as holding regular meetings, maintaining separate financial records, and avoiding commingling of personal and corporate assets. If these formalities are not observed and the corporate structure is used as a mere façade, courts may disregard the corporate entity.
Alter Ego: If there is such a unity of interest and ownership between the corporation and its shareholders or members that the separate personalities of the corporation and the individuals no longer exist, courts may treat the corporation as the alter ego of its owners and hold them personally liable.
Group Enterprises: In some cases, where multiple corporations are closely related or form part of a single economic unit, courts may pierce the corporate veil to achieve equity, particularly if one corporation's actions harm creditors or other stakeholders and the corporate structure is being used to shield culpable parties from liability.
Business law for the students of undergraduate level. The presentation contains the summary of all the chapters under the syllabus of State University, Contract Act, Sale of Goods Act, Negotiable Instrument Act, Partnership Act, Limited Liability Act, Consumer Protection Act.
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Presentation slides for a session held on June 4, 2024, at Kyoto University. This presentation is based on the presenter’s recent paper, coauthored with Hwang Lee, Professor, Korea University, with the same title, published in the Journal of Business Administration & Law, Volume 34, No. 2 (April 2024). The paper, written in Korean, is available at <https://shorturl.at/GCWcI>.
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Counter Point - III: Anti-competitive Practices in Pharmaceutical Sector -Case No C-87/2009/DGIR of Varca Druggist and Chemist against Chemist and Druggists Association,Goa - K.K. Sharma
1. B-432016]
COMPETITION LAW REPORTS MARCH, 2016
Counter Point - III: Anti-competitive Practices in Pharmaceutical
Sector - Case No C-87/2009/DGIR of Varca Druggist andChemist against Chemist
and Druggists Association, Goa
K.K. Sharma*
As done in some of the previous issues of Competition Law Reporter (CLR),
continuing with the series on dissenting and separate orders of different members
of the Competition Commission of India (Commission) in some of the cases, in
this write up the focus is on an old case filed before erstwhile MRTPC and
transferred to the Commission under the scheme, provided under the Competition
Act, 2002 (the Act ), to deal with such cases on repeal of MRTPC Act, 1969 and
commencement of enforcement of the Act w.e.f. May 20,2009. This was followed
by similar informations filed before the Commission alleging anticompetitive
practices in pharmaceutical distribution and retail sector. Various studies have
documented the prevalence of a number of anticompetitive practices in the
pharmaceutical sector which are so deeply entrenched that even pharmaceutical
giants have to succumb to them. The reason of successful perpetuation of these
anticompetitive practices is that the players responsible for initiation of these
practices and their continuation have not only have a wide reach across the
country but are extremely well organised. Interestingly, most of these informations
landed before the Commission because of the infighting amongst members of the
associations responsible for these practices or when one or some of the office bearers
of these associations became too domineering with other ordinary members. The
author, who as the first Director General of the Commission put the competition
law investigation framework in place and supervised the very first investigations,
looks at the different orders passed by the Commission and its members and the
way similar issues were handled in other jurisdictions worldwide.
* Chairman, KK Sharma Law Offices and ex Director General and Head of Merger Control
and Antitrust Divisions, CCI. The author can be contacted on kksharmairs@gmail.com or
kksharma@kkslawoffices.com.
India is a developing nation in transition.
A substantial part of its huge population
lives in villages and stark poverty.
Strangely, the poorer a person is on the
economic ladder, as a proportion of their
total earnings, more he or she spends on
health or to be away from sickness.
Actually, the term ‘health’ has yet to
reach them in the sense that it should.
Health, for these teeming poor millions,
is attending to sickness and not
necessarily to promote positive health,
even without the incidence of illness, for
which they do not have awareness, time
or resources. They have been various
studies and estimates for finding out the
distribution of cost of living of general
population on different heads. Health or
151
2. Competition Law ReportsB-44 [Vol. 1
COMPETITION LAW REPORTS MARCH, 2016
expenditure on health or sickness,
depending on the way you look at,
consumes a substantial part of the
earnings of an average household. Some
estimates put it at 40 % of the earnings
and even more1
. Out of this substantial
expenditure on health, broadly speaking,
the studies indicate that about 60-90% of
total expenditure on sickness/health is
actually spent on purchase of
medicines/drugs2
. The balance 10-40 %
is distributed amongst various other
components such as hospitalisation,
consultancy etc..
First of all, the zone from drug/medicines
manufacturers till the distributor is also
not free from the fears of cartelisation
and, from time to time, instances of
actually unearthed and penalised
cartelisations keeps on coming to notice3
.
This means that the price charged by
drug manufacturers is not necessarily a
price which was an outcome of a
perfectly competitive market. Secondly,
as if the first incidence of anti competitive
conduct was not enough, the price mark
up from the manufacturer till the last mile
connectivity point of the retailer is not
only substantial but, with a strong
stranglehold of the all India network of
distributors and retailers, distributers, is
also a victim of the anti competitive
conduct of their associations such as
Chemists & Druggists. Association of
Goa (CDAG).
Some consumer organisations have
attempted to look into the margins
charged by various manufacturers/
retailers/distributors, or a combination
of them, in pharmaceutical sectors. Some
of the outcomes of these reports are really
quite mindboggling. These show that it
is not uncommon for a drug manufacturer
to benefit from a huge profit mark up,
sometimes, of even up to 1638% on
different drug formulations4
( page 58 of
the report- cost of ‘Lycet’ to distributors,
manufactured by Lyca Labs, is Rs.1.44
whereas the MRP for this drug, according
to the study, was Rs. 25/-. This gives a
margin of Rs.23.56 on a cost of Rs.1.44 or
a percentage mark up of ((23.56/1.44)X
100=1638%)). If any drug manufacture
tries not to follow diktat of a body/
association representing druggists and
pharmacists, these powerful
associations have the resources, ability
and the will to bring the biggest of the
pharmaceutical giants on their knees.
Therefore, from the perspective of the poor
millions of this country, the curse of
falling sick (positive health awareness is
yet to informed majority of the population)
is a double whammy and sucks away a
huge amount of the available money in
hand and approximately an amount of
60-90% of the total health spend is given
to either the druggists/ pharmacists or
the person/stores selling or dealing in
surgical devices.
A look at various informations received
by Competition Commission of India
(CCI), in last five years of existence would
indicate that such a might of the CDAG
and other such associations, is not only
used for only threatening but can also be
put into practice after any triggering
event iscausedby any otherpharmaceutical
company or any errant member of one of
these associations or any retailer/
distributor who has the gumption not to
become member of one of these
associations. As an example, the apex
body of chemist and druggists
association decides the margin on which
drugs would be sold at shop or retailer.
1 http://www.ijms.info/ojs/index.php/IJMS/article/view/21/v1i2a5.html#.VuXAP1N97_Q
2 http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3573605/
3 http://www.moneylife.in/article/making-a-smart-choice-thin-line-between-compliance-
and-collusion/34523.html
4 http://www.cuts-ccier.org/pdf/Project-Report08Sep06.pdf
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Retailers are the final point of interaction
with patient/consumer for medicines
and drugs as far as the last mile
connectivity is concerned. If, to benefit
from the competition among different
retailers, some retailer decides to pass on
a fraction of his margin to the customer,
it may run fowl of the practices endorsed
by the association. It may result in boycott
of supplies from a particular
pharmaceutical company or many
companies to this poor retailer whose
intended conduct could have
precompetitive impact on market. Most
of the informations in pharmaceuticals,
having been brought before CCI, have
come through this group. As someone or
the other who was otherwise an
erstwhile member of the association
suddenly discovers the existence of
competition law when he turns into
problems on account of enforceability of
the diktat of the chemist and druggist
association(s).
Coming to the architecture of the
structure of chemists and druggists
associations, it may be noted that almost
every district of the country has a
chemists and druggists association. All
these associations thereafter elect and
are led by druggists and chemists
associations (by whatever name called)
as the level of state. All these state apex
bodies of chemist and pharmacist
association are represented in and,
therefore, controlled by All India
organisations of Chemists and Druggists
(AIOCD). If any member defies them, the
consequences through the boycott or any
other measure cannot really be welcome
by any business. Nearly all the cases of
pharmaceutical industries, which
landed before the CCI, are connected to
such issues.
One such matter arose out of the
complaint filed by M/s. Varca Druggists
and Chemists which finally came before
the Commission in the case of Varca
Druggist & Chemist & others v. Chemists &
Druggist Association, Goa. In this case, the
Informants (retailers of drugs and
medicines) had filed a complaint to the
Director General (Investigation &
Registrations), Monopolies and
Restrictive Trade Practices Commission
(MRTPC) against Chemist & Druggist
Association, Goa (CDAG), an association
of chemists, druggists, distributors,
stockists and retailers of various
pharmaceutical companies in Goa.
Allegations made in the complaint
related to:
1. Restrictive guidelines of CDAG-
forcing pharmaceutical companies to
appoint their stockists and
wholesalers only from those
individuals firms, who were members
of CDAG,
2. Practice of pharmaceutical
manufactures having to take a No
Objection Certificate (NOC) from
CDAG for appointing stockists or
wholesalers,
3. Practice of the new wholesalers not
being allowed to carry out business
without taking NOC from CDAG,
4. Practice of routing the government
tenders only through certain
authorized stockists,
5. Practice of not refunding payment
to retailers for stocks which have
crossed expiry date,
6. Threatening the drug manufacturing
companies with punitive actions if
they do not agree to the conditions by
CDAG,
7. Boycotting new entrants if they do
not agree to become the members of
CDAG;
Consequent upon the repeal of the
Monopolies and Restrictive Trade
Practices Act, 1969 (“MRTP Act”), the
case was transferred to Competition
Commission of India (“CCI”) in terms of
section 66 of the Act. As per the scheme of
the Act, after forming a prima facie opinion
that a case exists, the Commission
directed the Director General (“DG”) to
cause an investigation. The DG carried
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out a detailed investigation and submitted
a report to the Commission. In his report,
DG recommended that CDAG had
contravened Section 3 of the Competition
Act, 2002 (“the Act”) on the following
counts:
1. Imposing the condition on drug
manufacturers of procuring NOC for
appointing new stockists and
wholesalers;
2. Imposing the condition on
wholesalers of procuring NOC for
becoming the stockist of a drug
manufacturer;
3. Not allowing the wholesalers and
retailers to give discounts to their
consumers;
4. Boycotting non-member retailer and
wholesaler;
5. Wholesalers were not allowed to
directly sell the product to the consumer;
6. Trade margins were decided by
CDAG;
7. Fixing Prices for Product Information
System
To understand the allegations, it should
be realised that for launching of a new
drug by any drug manufacturer, the
retailers or the entire distribution
network should know about the product.
It is only possible if new product finds
its way into product information system
(PIS) of the chemist and drugs association
of the GOA (CDAG). It may be noted that
almost all the associations maintain, in
one form or the other, product information
system (PIS). This is extremely critical for
sale of any medicine/drug/molecule for
the very simple and basic reason that to
make any headway in the direction of
selling any product, first the existence of
that product should be known. For this
reason, entering any medicine /drug
into PIS is very critical entry barrier for
manufacturer of any new medicine/
drug. To make an entry in PIS, the
manufacturer is charged some money
before it can be entered into PIS and,
thereafter, launched in a particular
territory. After the matter was referred to
DG, the DG found, in his report that this
practice of payment for including a drug
in PIS as anti-competitive and held
members of the executive committee to
be responsible for this conduct. In
addition, the DG report also found that
the condition of obtaining a No Objection
Certificate (NOC) from the existing
distributors/retailers if a new distributor
/retailer is to be appointed in the same
geographical area was anti-competitive.
Amongst various informations received
before the Commission, this requirement
of NOC has been a cause of triggering
cause against the association by one or
more members. One such case, where on
account of not having received a NOC, a
party moved the CCI against Utkal
Chemist and Druggists Association was
case no. 79 of 2015. In this case one M/s
Kyal Agencies Pvt. Ltd. had to struggle
to get an NOC for being allowed to stock
the drugs and pharmaceuticals of
another company.
The majority view in this case of Varca
Drugs was held by four members of the
Commission which, in concurrence with
the report of DG, concluded that CDAG
had indeed contravened the provisions
of the Act. The Commission found the
contravention of the provisions of the Act
in the following anticompetitive practices:
1. Requirement of no-objection
certificate (NOC) from CDAG before
the appointment of stockists/
distributors leads to reduction of
supply in the market, in contravention
of Section 3 (3) (b) of the Act;
154
For launching of a new
drug by any drug
manufacturer, the retailers
or the entire distribution
network should know
about the product
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2. Fixing of trade margins for
stockists/distributors amounts to
fixing of price violating section 3 (3)
(a) of the Act;
3. Issue of restriction on discounts to
be allowed by the wholesaler to retailer,
and by retailer to end consumer;
4. Fixing of Public Information System
(PIS) charges leading to the fixing of
prices of drugs in violation of Section
3 (3) (a) of the Act.
The majority carried out a general and
broad analysis and found the above
practices to be anticompetitive.
Accordingly, penalty at the rate of 10%
of the average of the turnover for the last
two years, amounting to Rs. 2,00,000 was
imposed upon CDAG. The Commission
also concluded that if the practice of NOC
is done away with, there would be more
supply of drugs in the market and
consequently more availability of the
drugs to the consumers. At this point,
we are confronted with a very interesting
situation. Without attempting to answer
the questions, some questions naturally
arising in such cases are being listed below:
(a) Whether a trade association is
engaged in any business? Or is it only
a facilitation ground for all its
members who, in turn, are engaged in
business and do have individual
business turnovers?
(b) Can such a trade association have
a ‘turnover’? Is it nor merely a sum total
of some small token contributions
which are a part of the receipt side of
an ‘Income and Expenditure Statement’
to run the activities of the association
such as arranging meetings, serving
refreshments etc.? If these receipts are
taken as proxy of ‘ turnover’ of the
association, does it not mean that
automatically despite, on the face of it,
imposing a penalty of any association,
the Commission is virtually letting the
distributers.
One of the Members, Member Geeta Gauri
passed a separate concurrent order-
concurrent with the majority- in which
she opined that all the allegations should
be looked at separately and an enquiry
into whether such a conduct, on account
of each of these violations separately,
could have a positive impact also, in
addition to the perceived negative impact
on competition, should be carried out.
Only after such an exercise is done and
pros and cons of both the options
evaluated, can the Commission reach an
appropriate & definite conclusion about
the overall impact on the state of
competition of such practices. She had
following to say about the order of the
majority:
“This approach, while it may have its
merits can lead to a situation where
the positive activities of an
association tend to get blurred by the
undesirable outcomes. More
significantly, it prevents identification
of the precise anticompetitive effects
...” (paragraph 10)
She further individually analysed the
alleged anticompetitive conducts to find
out if, in reality, such conducts really
have an appreciable adverse effect on
competition(AAEC). On the issue of
requirement of NOC, she agreed with the
majority that such a requirement was
indeed anticompetitive, she emphasised
that such a guideline of NOC by CDAG
is emanating from the MoUs signed
between CDAG and various other
national and state associations hence the
conduct of such associations should also
have been investigated. On the issue of
price fixation, she has the following to
say:
“The critical aspect of margin fixation
being anti-competitive in the Main
order was that it was leading to price
fixation. In this regard, it is important
to note that the margins are allowed as
a percentage of MRP, but determination
ofMRP isvested with the manufacturing
of company, and not the Association.
Also, in any product where MRP is to
be indicated, the margins for the
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intermediate players are considered by
the manufacturer and these are largely
based on industry practices and do not
fluctuate much over a period of time....
Having said that the system of margin
fixation is conceptually different and
does not imply price fixation...
In India ... NPPA regulates the pricing
of scheduled drugs and monitors the
pricing of non-scheduled drugs,
which protects the end consumer from
any adverse effect (if any) of margin
fixation in the industry.”
At this juncture, it is brought to the
attention of the reader that though such
margin fixation may not directly lead to
price fixation (as also held by the Member
(GG)), but the fact remains that by
capping the margin, the retailers may not
have any incentive to improve their
services which they could offer to the end
consumer. Similarly, on the issue of PIS
charges, she held that PIS serves a very
useful purpose of dissemination of
information and leads to a significant
reduction of cost and, therefore, charges
for such system should not be held to be
anticompetitive.
The conduct of trade associations as
documented elsewhere in the form of
International jurisprudence is full of
instances, where the effect of the conduct
of the association was looked into before
reaching a conclusion whether the
association had acted in an anticompetitive
manner-
In the very same case of Varca drugs,
another member of the Commission,
Member Dhingra also gave a concurrent
order, however he passed a separate
penalty order. In the separately passed
penalty order, he held that:
“... An Association of enterprises in
itself may not have significant
turnover. That does not mean that an
Association of enterprises indulging
into cartel activity, highly affecting the
competition should go scot free. If it is
so, it will be easy for the enterprises to
indulge into cartelization & escape
penalty by forming an association.
That could never be the intention of
the legislature. ..”
Based on the above arguments, he
directed that since the total turnover of
all the members of CDAG would be
approximately Rs. 380 crores, a penalty
of Rs. 20 Crores on CDAG should be
imposed which CDAG would recover
from its members and submit to the
Commission. Here also, without
attempting to answer the questions, some
questions which arise are being listed
below:
(a) When dealing with a serious
matter such as imposing a penalty,
because of violations of the Act, can
an approximation be used in absence
of the exact figures either having been
available or found out?
(b) Is it the exclusive responsible
responsibility of the agency imposing
penalty to recover it when it has
statutory backing, provided in the Act,
or can it delegate it to the association
of the people on whom penalty has
been imposed upon and, thereafter,
deposit with the Commission?
These are early days yet for accumulating
rich experience in implementation of
competition law in India. However, other
jurisdictions have dealt with similar
situations for much longer periods. It may
be instructive as to how the other
jurisdictions have dealt with similar
anticompetitive conducts by associations.
The Office of Fair Trading, UK (OFT) has
issued decisions that have considered
the potential for anti-competitive
practices on the part of trade
associations. In GISC5
one of the rules of
the General Insurance Standards
5 Case CA98/01071/00, 13 November 2002; http://www.oft.gov.uk/advice_and_resources/
resource_base/ca98/decisions/general-insurance
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Council prevented its members from
dealing with insurance intermediaries
unless they were themselves members of
GISC. After the Competition Appeal
Tribunal concluded that this rule had the
object and effect of restricting competition
to an appreciable extent, GISC dropped
the offending rule and the OFT
concluded that the remaining rules did
not infringe the Chapter I prohibition.
In Northern Ireland Livestock and
Auctioneers’ Association (NILLA)6
the OFT
concluded that the NILAA had infringed
the Chapter I prohibition by
recommending that its members introduce
a standard buyer’s commission to be
payable by purchasers of livestock in
Northern Ireland cattle markets. No
penalty was imposed however due to the
exceptional circumstances of the case.
In the European Union, in French Beef
[2003] a trade association was found
guilty of participating in a price-fixing
cartel. Six federations entered into an
agreement jointly setting a minimum
price for beef and agreeing to suspend or
limit imports of all types of beef into
France. The European Commission (the
Commission) fined the participants a
total of 16.7m and one individual
federation was fined 12m. There were
several aggravating factors, including
the fact that three of the federations were
involved in acts of violence against
individuals aimed at forcing them to
comply. All of the federations continued
to apply the agreement secretly despite a
warning from the Commission.
French beef sector cartel sanctioned in
April 2003 with fines totalling 16.7
million on six federations of French
farmers. In the face of difficulties on
European beef markets the federations
had jointly set a minimum price and
agreed to prevent imports from outside
France. Several factors contributed to the
gravity of the cartel, for example,
documents found on the premises of the
federations during the inspections
indicated a full knowledge of the
illegality of the agreement, and the
federations of farmers used threats of
violence against slaughterers in order to
oblige them to respect the agreement. The
press release accompanying the decision7
notes that:
“This is the first time that the
Commission has imposed fines on
farmers’ unions. The Commission
recognises the importance of trade
union freedom, but it is not the job of
trade unions to assist in the
conclusion and implementation of
agreements that disregard the rules
governing law and order and, more
specifically, the competition rules.”
The Court confirmed this and held that
a union can legitimately defend the
interests of its members, but cannot use
the principle of freedom of association to
justify an infringement of the competition
rules. The exchange of information may
have an adverse effect on competition
where it reduces or removes
uncertainties inherent in the normal
process of competition. The exchange of
confidential or business-sensitive
information between competitors will
often form an integral part of cartel
activity: most cartels require a system of
information exchange to operate.
Individualised (or even aggregated)
market data may also help identify any
companies that cheat in the cartel.
6 Case CP/0504-01, 3 February 2003; http://www.oft.gov.uk/advice_and_resources/
resource_base/ca98/decisions/livestock; in particular the OFT took into account the effects
of the diseases BSE (bovine spongiform encephalopathy) and foot and mouth disease on
the cattle industry in Northern Ireland generally and cattle auctioneers in particular, by way
of increased veterinary health regulation, reduction in throughout of cattle and the temporary
closure of the marts.
7 Press release IP/03/479 of 2 April 2003.
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According to the European Commission
in Amino Acids [2001]:
‘Where an exchange of… information
is an adjunct of anti-competitive
practice, it is also caught by the
prohibition in Article 81(1) as an
integral part of that practice.’8
Even
when the information exchanged is in
the public domain or relates to purely
historical prices, its exchange can
infringe Article 81 and/or Chapter 1
where it underpinsother anti-competitive
arrangements.9
Where membership of a trade association
is an essential pre-condition for
admission to a particular market or
profession, the membership criteria must
be clear, precise, objective and legitimate.
If they are not, the trade association risks
excluding competition and therefore a
requirement that admission to
membership is subject to approval by all
or the majority of members is likely to
infringe competition law where the trade
association has important status in the
industry, unless the rule can be shown
to be objective and does not exclude
otherwise capable firms from competing
on that market. In the event of refusal of
admission, there should be an
appropriate appeal procedure.10
For example, in Cauliflowers11
[1978],
membership of a federation was a
prerequisite to gaining access to auction
centres and the admission of new
members to the federation had to be
approved by a majority of the board of
directors. The European Commission
held that this condition prevented new
dealers from obtaining access to the
auction centre and was therefore
restrictive of competition as practically
all the vegetables concerned were sold
through auctions to which only
federation members had access.
In certain circumstances, the adoption
of common standards may be desirable,
such as agreements on technical
standards where the setting of standards
is transparent and unrestricted. The
parties should be free to diverge from the
agreed standards or to make or market
products that do not conform to the
standards. The standards should be
objectively justifiable, for example, use
of a quality mark for consumer protection.
However, such agreements may infringe
competition law where they prevent
parties from selling different products,
limit technical development or are used
to prevent imports.12
Industry codes of conduct that restrain
competition may be anticompetitive. The
US Department Of Justice challenged a
professional society’s prohibition in its
canon of ethics of competitive bidding
8 Commission decision, Amino acids [2001] OJ L152/24.
9 Joined cases C-204/00 etc, Cimenteries CBR & Ors v Commission [2004] ECR
10 Cauliflowers [1978]. Also see Dansk Pelsdyravlerforening v Commission of the European
Communities (Competition) [1992] EUECJ T-61/89 where a Danish trade association
organised auctions through which the majority of the relevant products in Denmark were
sold. The Court of First Instance held that the loyalty obligation imposed was so wide that
it had the effect of rendering it extremely difficult for third parties to enter the market.
11 IV/28.948 - Cauliflowers
12 Supra note 5.
158
Where membership of a
trade association is an
essential pre-condition for
admission to a particular
market or profession, the
membership criteria must
be clear, precise, objective
and legitimate
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by its members (National Soc. of Professional
Engineers v. U.S.13
). In that case the
Supreme Court held that the trial court
was justified in refusing to consider the
defense that the canon was justified
“because it was adopted by members of
a learned profession for the purpose of
minimizing the risk that competition
would produce inferior engineering
work endangering the public safety.”
The Court held that “no elaborate
industry analysis is required to
demonstrate the anticompetitive
character of such an agreement,” and
that “the Rule of Reason does not support
a defense based on the assumption that
competition itself is unreasonable.”
In Northwest Wholesale Stationers v. Pacific
Stationery & Printing Co.,14
the US
Supreme Court addressed the exclusion
of companies seeking membership in a
wholesale buying cooperative of office
supply retailers. The Court noted that the
cooperative “permit[ted] the participating
retailers to achieve economies of scale in
both the purchase and warehousing of
wholesale supplies, and also ensure[d]
ready access to a stock of goods that
might otherwise be unavailable on short
13 National Society of Professional Engineers v. United States, 435 U.S. 679 (1978).
14 472 U.S. 284 (1985)
notice.” The asserted reason for expelling
the plaintiff – failure to comply with a
cooperative rule on disclosure of a
change in stock ownership – was
described as a “reasonable” rule which
“may well provide the cooperative with
a needed means for monitoring the
creditworthiness of its members.” The
Court held that a rule of reason analysis
was appropriate:
“[w]hen the plaintiff challenges
expulsion from a joint buying
cooperative, some showing must be
made that the cooperative possesses
market power or unique access to a
business element necessary for
effective competition.”
The overview of the pharmaceutical
sector from the perspective of competition
law shows that the competition law
jurisprudence is yet to firm up in India.
However, going by the instances in
nearly similar situations, it can be seen
that there is a rich history of competition
law jurisprudence in other older
jurisdictions which may come handy as
we move along the journey of competition
law enforcement in India.
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159