The Competition Commission of Pakistan (CCP) while setting aside its show-cause notice issued to Pharma Bureau for prima facie cartelization, has warned that the pharmaceutical sector is being observed closely and any collusive or anti-competitive activity shall be dealt with strictly.
In another instance of impartial and unbiased enforcement, CCP is setting aside its inquiry of the alleged violation of Section 4 of the Competition Act, 2010 by the Pharma Bureau.
The Pharma Bureau is an association and representative body of more than 20 multinational pharmaceutical companies. In 2016, CCP took suo-motu notice and conducted an inquiry relating to the allegations published in national dailies, that a number of multinational pharmaceutical companies have increased prices of some medicine by up to 300%.
CCP Enquiry and Action
CCP inquiry team inspected the Pharma Bureau’s Karachi office and some relevant material was impounded.
On the inquiry’s recommendations, a show-cause notice was issued to the Pharma Bureau. The CCP inquiry team found that Pharma Bureau and its member undertakings have been involved in the sharing of strategic data and commercially sensitive information, providing continuous updates and comprehensive overview of prices, costs, profits, demands and the industry as a whole.
Which have then been used to prepare recommendations and agreements on the increase in prices of various pharmaceutical products by multinational pharmaceutical companies through the Pharma Bureau. Which is in violation of Section 4 of the Competition Act.
The inquiry also found that the Pharma Bureau and its member undertakings appear to have been increasing prices across the board and operating in a collusive and cooperative manner to influence the pricing policies.
During the hearings, the CCP inquiry team could not substantiate the allegations published in national dailies and its inquiry report.
The CCP order stated that the Pharma Bureau can not be held responsible in regards to the Violation of Section 4 of the Act, which states that any decision which has the object or effect of preventing, restricting or reducing competition within the relevant market is a violation. The Order also stated that the importance of undertakings and associations remaining vigilant to reduce the threat of potential collusion and other anti-competitive practices.
CCP bench reiterated that the Commission remains vigilant against all forms of collusion and cartelization that may take place in any market, including the Pharmaceutical Sector. These anti-competitive activities affect not just the key players in the market but the general public as well. Whenever the Commission becomes aware of any such anti-competitive activity it will take strict action against the violators.