CCI starts probe on alleged price fixing of key anti diabetic drugs
, ET Bureau|
Dec 14, 2017, 12.14 AM IST
Competition Commission of India has initiated an investigation on drug makers Abbott, Novartis, Emcure Pharma and USV Pvt Ltd over alleged price fixing of the blockbuster anti-diabetic drug Vildagliptin, people aware of the development said.
The fair play regulator has sent notices to the four drug makers, asking them for trade details of this drug in an attempt to find out if the companies colluded with each other to keep the price of the drug at certain levels, they said. Competition Commission of India (CCI) is also looking at the involvement of senior executives from these companies over price fixing, sources said.
Swiss drug maker Novartis confirmed it has received a notice from CCI and has responded to it. "Given that the matter is sub-judice, you will appreciate that we are unable to comment any further," a company spokesperson said in an email response to ET.
Abbott did not respond to repeated phone calls and an email sent by ET as of press time Wednesday. Emcure also did not respond to an email query as of press time while USV remained unreachable for a comment.
CCI's notice comes 10 months after ET had reported that a whistle-blower had reached out to various Indian regulators over details of cartel allegedly formed by these drug companies for this specific drug.
Vildagliptin, sold under the brand name Galvus, is a proprietary drug of Novartis that comes under the new class of antidiabetic drugs known as DPP 4 inhibitors. These drugs are prescribed for patients with Type 2 diabetes and are considered to be far more effective in controlling blood glucose level compared to the older class of drugs.
Novartis, which reported revenues worth Rs 397 crore this year for this drug, has licensed the marketing rights to Abbott, Emcure and USV. This year, the combined brand of Vildagliptin recorded a sales worth Rs 790 crore, in the Rs 2,600-crore gliptin market.
The whistle-blower had reached out to several Indian regulators in February alleging that Novartis controls the pricing structure for Vildagliptin and that is followed by the other license holders, where the drug prices are matched to the lowest decimal. Though there is no written communication between partners, these companies also synchronise every price change, the person alleged. To back these claims, the whistle-blower had sent a chart that listed the various dosage size of these brands, and all of them were priced in the same range.
Price cartelisation is prohibited under the Competition Act, 2002.
Antitrust lawyers that ET spoke to said that though cartel enforcement has been a focus of CCI since the beginning, it has taken time to gain traction.
Estimates suggest that CCI has investigated several cases of cartels (including in pharmaceuticals sector), imposing a fine of more than Rs 7,500 crore on various companies and their officers.
The fair play regulator has sent notices to the four drug makers, asking them for trade details of this drug in an attempt to find out if the companies colluded with each other to keep the price of the drug at certain levels, they said. Competition Commission of India (CCI) is also looking at the involvement of senior executives from these companies over price fixing, sources said.
Swiss drug maker Novartis confirmed it has received a notice from CCI and has responded to it. "Given that the matter is sub-judice, you will appreciate that we are unable to comment any further," a company spokesperson said in an email response to ET.
Abbott did not respond to repeated phone calls and an email sent by ET as of press time Wednesday. Emcure also did not respond to an email query as of press time while USV remained unreachable for a comment.
CCI's notice comes 10 months after ET had reported that a whistle-blower had reached out to various Indian regulators over details of cartel allegedly formed by these drug companies for this specific drug.
Vildagliptin, sold under the brand name Galvus, is a proprietary drug of Novartis that comes under the new class of antidiabetic drugs known as DPP 4 inhibitors. These drugs are prescribed for patients with Type 2 diabetes and are considered to be far more effective in controlling blood glucose level compared to the older class of drugs.
Novartis, which reported revenues worth Rs 397 crore this year for this drug, has licensed the marketing rights to Abbott, Emcure and USV. This year, the combined brand of Vildagliptin recorded a sales worth Rs 790 crore, in the Rs 2,600-crore gliptin market.
The whistle-blower had reached out to several Indian regulators in February alleging that Novartis controls the pricing structure for Vildagliptin and that is followed by the other license holders, where the drug prices are matched to the lowest decimal. Though there is no written communication between partners, these companies also synchronise every price change, the person alleged. To back these claims, the whistle-blower had sent a chart that listed the various dosage size of these brands, and all of them were priced in the same range.
Price cartelisation is prohibited under the Competition Act, 2002.
Antitrust lawyers that ET spoke to said that though cartel enforcement has been a focus of CCI since the beginning, it has taken time to gain traction.
Estimates suggest that CCI has investigated several cases of cartels (including in pharmaceuticals sector), imposing a fine of more than Rs 7,500 crore on various companies and their officers.
