Competition Commission of India(CCI) have found the following practices of All India level, State level, District level associations of chemists, druggists, stockists, whole-sellers and manufacturers as anti-competitive:

1.   Issuance of No Objection Certificate or letter of consent by such associations for opening chemist shop/being appointed stockists/distributor/whole-seller.

2.   Compulsory payment of PIS charges by pharmaceutical firms/manufacturers to associations for release of new drug/new formulation.

3.   Fixation of trade margins at different levels of sale of drugs/medicines.

4.   Issuance of instructions to chemists/druggists/shops/stockists/whole-sellers/manufacturers restricting discounts on sale of drugs in retail or wholesale.

5.   Issuance of boycott calls by the associations to their members against any enterprise for not following the instructions of associations.

Penalties have been imposed by CCI on such trade associations of chemists and druggists for violation of provisions of Competition Act.

CCI had issued cease & desist order against the associations directing them not to indulge in anti-competitive practices and the associations have filed undertakings that they would not indulge in such illegal practices. Non-Compliance of the orders of CCI involves severe penalties and can lead to prosecution.

All concerned have been informed through a public notice published in the leading newspapers on 31st January, 2014 that they can approach the Commission bringing to its notice violations of the orders passed by the Commission which are available on its website (http://www.cci.gov.in).

RC/nb

Anti-competitive practices: associations penalised under Competition Act and ordered to cease margin-fixing, discount restrictions and boycotts. Associations of chemists, druggists, stockists, wholesalers and manufacturers engaged in anti-competitive practices including gatekeeping via No Objection Certificates, compulsory release charges, fixation of trade margins, restrictions on discounts, and boycott calls. The Competition Commission imposed penalties and issued cease and desist orders under the Competition Act, obtained undertakings from associations to stop such conduct, and warned that non-compliance may result in severe penalties and prosecution while inviting reports of violations.