CCI (Competition Commission of India)
Competition Law and the Pharmaceutical Industry
(S L Rao)
15 06 2009
This Report recognizes the complexity of the pharmaceutical industry from the point of
view of competition. The comments are more for making the report useable by the CCI.
1. Pharmaceutical products are of two kinds: ‘ethical’ products which can be
prescribed only by doctors; and over the counter ones that can be sold freely by
the retailer. In this category there those that are advertised, designated as
proprietary products.
2. Ethical products are prescribed and the customer is the doctor to who the product
has to be sold. This has led to the practice of co-opting the doctor by giving free
products, holidays, entertainments, and even direct cash payments. The MCI is
supposed to police this but does not. The CCI has a role to play in ensuring that
doctors are not suborned in this way, hurting competition.
3.
Retailers are supposed to sell ethical products only on doctors’ prescriptions but
in India many retailers will sell any pharmaceutical product without prescription.
This can be hazardous to the consumer. I am not sure that there is an issue for CCI
in this.
4. OTC/proprietary products are advertised and promoted. Claims are made that are
not always accurate. Clearly the CCI has a role in ensuring that claims are true
and the customer is no misled.
5. It is estimated that 40% of pharmaceutical products made and sold in India are
fakes. The Drug Regulatory authority is ineffective in controlling this. CCI may
have a role in getting the Regulator to do his job effectively.
6. New pharmaceutical are tested before marketing on animals and humans. Trial
results are many times disclosed selectively and adverse reactions not disclosed
intelligibly to doctors and patients. Clearly the CCI has a role to play here.
7.
Promotional literature is the primary source for information to doctors on
pharmaceutical products since very few spend time in studying learned journals
where trials are reported. CCI has a role to see that doctors get true information in
the literature.
8. Many pharmaceuticals are under price controls, prices determined by NPPA. It is
for NPPA that controlled prices are honoured and based on true costs.
9. Despite being a manor exporter of generic drugs, Indian markets have very little
availability of generics and hence the consumers do not have the opportunity to
buy products that are cheaper than the branded ones now available but where the
active ingredients are what the doctors want for the patient. CCI has a role to play
in this area.