High-market concentration in some molecules is major issue in Sun Pharma-Ranbaxy deal: CCI chairman, Ashok Chawla

The major issue being probed in the multi-billion dollar Sun Pharma-Ranbaxy deal is to see if there is a high-market concentration in some molecules which will emerge as result of the proposed merger and acquisition (M&A) deal, chairman of the Competition Commission of India (CCI) said at an ASSOCHAM event.

The major issue is that in many of the molecules, the basic building block in the pharmaceutical industry, whether in some of those molecules there is a high-market concentration which will emerge as result of the combination, said Mr Chawla.

The CCI chief said that it is for the first time that CCI is going for the public scrutiny of a proposed M&A deal to ensure fair competition in the domestic pharma market.

Talking about controlling the prices of essential drugs, head of the fair trade regulator said, Only if it is unfair and discriminatory do we come into the picture but the government has an instrument in terms of essential medicines' list where they regulate prices and I think it will be done under that.

On the issue of imposing fines on carmakers for violating trade norms in the spare parts and after services market, Mr Chawla said, Our whole attempt was to ensure that the spare parts and maintenance market is more broad-based, user-friendly and less expensive for the consumers.

The fair trade watchdog's chairman said, For an emerging market economy like India, we need to bet on knowledge and creativity of mind and for that we need to invest much more on research and innovation and not just borrow, copy or steal but actually apply the mind to invest more on that.

We also need to design our public policies and legal systems which are appropriate to encourage this, he added.

On the issue of technology transfer agreements, Mr Chawla said, We need to look at clearly in terms of the interplay of these forces whether these agreements tend to divide and partition markets or not, whether they foreclose the acquisition or acceptance of new technologies or not.

Sharing his views, Mr Chaitanya Prasad, Controller General of Patents, Designs & Trade Marks said, One only needs to look at IPR policies of major economies like the US, China and EU and at how competition unfolds in many companies in innovative industries to see that IP and competition law share the same underlying goals as both promote competition in the dynamic sense.

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