Aggrieved by an order of the Competition Commission of India (CCI), a Chennai based registered Trust, Pharma Care Foundation, has moved an appeal before the Competition Appellate Tribunal (COMPAT) challenging the direction of the Commission that product information services (PIS) charge could be paid by pharmaceutical firms on voluntary basis.
The appeal was filed by R Srinivasan, a Trustee of the Foundation. According to the appeal, the Commission’s order came on 19.2.2013 on a petition filed by Santuka Associates, a C&F agent based at Cuttack.
In his petition the C&F agent had alleged that AIOCD was abusing its dominant position by limiting and restricting supply of pharmaceutical drugs through unfair and discriminatory ways. The organisation was collecting an amount of Rs.2000 per product from new stockists of pharma companies in the guise of product information services.
In its order, the Commission has observed that the actions of AIOCD and its affiliates regarding delay or withholding PIS approval on any ground is in violation of the provisions of Section 3 of the Competition Act. However, while passing orders under Section 27 of the Act, the Commission directed that AIOCD could issue circular stating that PIS charges were not mandatory and PIS services could be availed by manufacturers/pharmaceutical firms on voluntary basis. The Commission has observed that the practice of PIS approval from the state units of the organisation on payment of the prescribed charges in the name of advertisement in the association bulletin is another condition laid down by AIOCD and in the absence of which new products are not allowed to be introduced in the distribution channel.
According to the petitioner, by giving the option of ‘voluntary’ PIS services, the Commission is permitting AIOCD as a seal of authority to continue PIS on voluntary basis. The Commission has erred in appreciating that as per the DPCO, it is a mandatory requirement that a manufacturer or importer should issue a price list in Form V to the retailer or dealer, who in turn is obliged to display the same in a prominent manner for the attention of the customers.
It is mentioned in the appeal that the appellant is aggrieved by the impugned order of the Commission because it (the Commission) has failed to take into account the interests of the patients and consumers of life saving drugs when reached the conclusion, and they are compromised in view of the tactics adopted by AIOCD, supported by OPPI and IDMA. It is submitted that the Commission has failed to appreciate that the payment of PIS charges to AIOCD under the guise of circulation of price list to their members is not in compliance of the DPCO norms and overlooks its very purpose.
The appellant alleges that the AIOCD and its affiliates delay or withhold the launch of new products in the market unless PIS is not paid to them. Such an action on the part of the organisation results in restraint of trade besides leading to the denial of market access by the manufacturing company. This kind of controlling of supply/marketing of new drugs will deprive the consumers of the benefits of such medicines. The appellant further submitted that giving the trade body an option of collecting the PIS on voluntary basis, it will not help them stop their malpractice because under the guise of collecting PIS on voluntary basis the organisation will keep on using the same coercive tactics they are following now.
Apart from AIOCD, the petition of Pharma Care Foundation includes Organization of Pharmaceutical Producer of India (OPPI), Indian Drug Manufacturers’ Association (IDMA), USV Limited Mumbai, Santuka Associates Pvt. Ltd and CCI as Respondents.