CCI to probe Cipla, 4 others for anti-competitive practices

NEW DELHI: Fair trade regulator Competition Commission is probing allegation of anti-competitive practices against five entities related to pharmaceutical industry, including drug maker Cipla.

The complaint has been filed against the five entities for allegedly engaging in anti-competition practices in granting stockist licence for medicines in Himachal Pradesh.

The Competition Commission of India (CCI) is probing the allegation against Macleods Pharmaceutical, FDC Ltd, Cipla, Himachal Pradesh Society of Chemist & Druggist Alliance and its President.

the Commission is of the opinion that there exists a prima facie, case to direct the Director General to cause an investigation into the matter," CCI said in an order dated April 11.

CCI observed that the Himachal Pradesh Society of Chemist & Druggist Alliance "appears to be controlling and regulating the appointment of stockist-ship of each and every pharmaceutical company in the state of Himachal Pradesh".

"The evidence placed on record...shows that no one can be appointed as the stockist of any pharmaceutical company in Himachal Pradesh without the NOC (No objection Certificate) of Himachal Pradesh Society of Chemist & Druggist Alliance," CCI noted.

A stockist is a retailer or distributor who has stocks of a certain type of item for sale.

As per a complaint by filed by one Rohit Medical Store, the Society compelled the pharmaceutical firms to grant stockist-ship in the state to those persons who had obtained NOC from it.

The complaint alleged that it was not being granted stockist-ship of Macleods Pharmaceutical, FDC and Cipla due to the condition imposed to obtain NOC from the Society.

In its submissions to CCI the complainant has placed on record a CD wherein the President of the Society in a conversation with employees of Macleods was emphasising that NOC was a must.

Besides, the complainant also submitted a letter showing that NOC was being demanded for appointing him as stockist.

CCI has noted that the conduct of the Society which made it compulsory for the complainant to obtain NOC before appointment as stockist of Macleods and FDC appeared to be in violation of the Competition Act.

"...the said conduct of Himachal Pradesh Society of Chemist & Druggist Alliance, "appears to have restricted the supplies of medicines of Macleods Pharmaceutical and FDC Ltd in the State of Himachal Pradesh," CCI added.

The regulator has asked the Director General to submit his report within a period of 60 days from the communication of this order.