Cracking down on unfair business practices in the pharma sector, Competition Commission has imposed a penalty of over Rs 2.93 lakh on Himachal Pradesh Society of Chemists and Druggists Alliance and its president.
Besides, the fair trade watchdog has directed the grouping to "cease and desist from indulging in the practices which are found to be anti-competitive".
While the penalty on the association is Rs 2.65 lakh, its president Sanjeev Pandit has been fined over Rs 28,000.
The ruling follows a complaint filed by one Rohit Medical Store which had alleged anti-competitive ways by imposing conditions for obtaining No Objection Certificate (NOC) from the Alliance prior to the appointment of stockists in Himachal Pradesh.
In its 25-page order, the Competition Commission of India (CCI) said that anti-competitive conducts need to be penalised in such a way so as to cause deterrence in future among the erring entities engaged in such activities.
"It has been noted by the Commission that many of the state and regional chemists and druggists associations have been indulging in anti-competitive conduct in spite of Commission holding such practices in violation of provisions of the (Competition) Act in similar cases," it said.
Earlier, under the earlier Monopolies and Restrictive Trade Practices ((MRTP) Commission, the Himachal Pradesh State Chemists & Druggists Association was directed to cease and desist from unfair business practices.
"Subsequently, the said association changed its name to the Himachal Pradesh Society of Chemists and Druggists Alliance probably to circumvent the directions of MRTP Commission.
"The Commission also noted that the Alliance did not furnish the minutes of its executive committee meetings and thereby hindered the investigation process," the order, dated January 29, said.
The fine on the grouping translates to 10 per cent of its annual turnover in the last three financial years while that on Pandit amounts to eight per cent of his annual income in the last three fiscals.
The complaint was also filed against three other entities -- Macleods Pharmaceutical Ltd, FDC Ltd and Cipla Ltd -- but CCI could not find enough evidence to conclude that they violated competition norms.
In recent times, CCI has pulled many entities in the pharma sector for violating competition norms.
