CCI fines Jalgaon-based medicine dealers' body, 2 others for anti-competitive trade practices

The Competition Commission of India (CCI) has imposed a total fine of over Rs 4 lakh on the Jalgaon District Medicine Dealers Association, its president and a former vice-president for indulging in anti-competitive trade practices.

The Jalgaon-based grouping was levied a penalty of Rs 80,185, while its President Sunil R Bhangale and former vice-president Anil R Zawar were fined Rs 2.14 lakh and Rs 1.27 lakh, respectively.

The ruling came on a complaint filed by Nadie Jauhri who alleged that the association was collecting product information service (PIS) charges from the manufacturers of pharmaceutical products in violation of the provisions of the Competition Act.

The complainant also furnished the financial records of the association from 2012 to 2015 with regard to levying of PIS charges from pharmaceutical firms.

PIS pertains to a fee charged by chemists and druggists' associations for introducing a new product launched by the pharmaceutical companies in the bulletins or newsletters published by such associations and in return, the said associations are required to publish the information and circulate it among all the dealers.

The commission said decisive factor of whether PIS charges are anti-competitive or do not depend upon whether such charges are being paid voluntarily or mandatorily by the pharmaceutical companies.

In this case, CCI ruled that "the mandatory requirement of payment of PIS charges, as alleged by the Informant (Nadie) in the present case, stands established by the evidence on record, against the Jalgaon District Medicine Dealers Association," the competition watchdog said in an order dated June 20.

Mandatory payment of PIS resulted in limiting and controlling the supply of drugs in the market and amounted to an anti-competitive practice, in violation of the Section 3 of Competition Act, the fair trade regulator said.

Section 3 pertains to anti-competitive agreements.

Compulsory payment of PIS charges has been held to be anti-competitive by the Commission in its previous orders and despite such orders the association was found to have indulged in such practices, CCI said while imposing a fine on the entities.