Competition Commission of India (CCI) has slapped penalty worth Rs 32,724 on Chemists and Druggists Association of Baroda (CDAB) for indulging in restrictive trade practices. A complainant had alleged in 2009 that CDAB was limiting and controlling the supply of medicines in the market by mandating a no object certificate (NOC) before appointment of stockists before even pharma companies could introduce new products into the market. “Besides, there were allegations that CDAB was fixing the trade margins for the wholesalers/retailers. Subsequently, the case was transferred to the Commission by MRTPC (Monopolies and Restrictive Trade Practices Commission),” CCI said.
After a detailed investigation, the competition watchdog in 2012 passed an order stating that CDAB was imposing the requirement of mandatory NOC and was also fixing margins for the wholesalers and retailers by enforcing the norms laid down by All India Organisation of Chemists and Druggists (AIOCD). However, based on an appeal filed by CDAB, Competition Appellate Tribunal (COMPAT), which is now known as NCLAT, in November, 2016 set aside CCI’s 2012 order and remanded the matter back to the Commission for fresh adjudication. The government had in May, 2017 dissolved COMPAT and notified that all applications filed or pending before COMPAT will now be transferred to National Company Law Appellate Tribunal (NCLAT). After considering the matter afresh, the competition watchdog found that CDAB was indulging in ‘anti-competitive practice of insisting NOC prior to the appointment of new stockists by pharmaceutical companies and was also fixing/prescribing the trade margins. – Money Control