CCI rejects plea alleging anti-competitive conduct by drug bodies, pharma cos
This story was originally published at 19:57 IST on 29 June 2026
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NEW DELHI – The Competition Commission of India Monday rejected a petition alleging anti-competitive conduct by drug manufacturers associations, pharma companies like Dr. Reddy's Laboratories Ltd., Torrent Pharmaceuticals Ltd., Cipla Ltd., Panacea Biotec Ltd., Pfizer Ltd., Glenmark Pharmaceutical Ltd., Sun Pharmaceutical Industries Ltd., FDC Ltd. and others, in entering arrangements that were restrictive in nature and disrupted free trade.
Kailash Gupta, President of All India Chemists and Distributors Federation, had alleged that All India Organization of Chemists and Druggists compelled drug manufacturers' associations to enter into a memorandum of understanding containing various unreasonable conditions, including insistence on letters of cooperation, with the objective of leveraging its position to benefit the chemist organisation and its office bearers.
The chemist organisation and its affiliated associations collected product information service charges from drug manufacturers under the pretext of disseminating product information, compelling manufacturers to comply due to fear of adverse market consequences and business disruptions, said Gupta. Such practices amounted to concerted and conspiratorial refusal to deal and group boycott of members of the chemist and distributors federation, violating the Competition Act, 2002.
Further, there were allegations of several pharmaceutical companies implementing or adhering to anti-competitive practices, including demanding or mandating no-objection certificates prior to the appointment of stockists, discontinuing supplies at the instance of state associations, following anti-competitive provisions of the memorandum of understanding, and determining trade margins in consultation with All India Organization of Chemists and Druggists.
The antitrust body said no cogent evidence has been brought on record to establish that the collection of product information service charges by the chemist organisation and its affiliated associations from pharmaceutical companies was mandatory in nature. This conclusion assumes greater significance in light of statements made by pharmaceutical companies themselves being directly affected stakeholders, indicating an absence of compulsion in payment of such charges, said the competition regulator.
The competition commission rejected its director general's probe that the practices relating to letters of cooperation requirements and product information service approvals operated as mandatory preconditions having the effect of limiting or controlling the supply of pharmaceutical products in the market. The material available on record does not conclusively establish that the appointment of stockists was dependent upon obtaining letters of cooperation or that pharmaceutical companies were prevented from launching products in the absence of product information service approvals after 2014, said the regulator. Further, the evidence on record also does not establish any consistent or systematic boycott mechanism against pharmaceutical companies for failure to obtain letters of cooperation for non-payment of product information service charges after 2014, it said.
Several pharmaceutical companies consistently maintained that stockist appointments, trade margins and product launches remained matters of independent commercial decision-making and that any interaction with associations was only consultative, facilitative, precautionary or based on prevailing trade practices rather than compulsion, said the regulator. The pharmaceutical manufacturers explained that trade margins were determined either in accordance with prevailing market conditions, Drugs (Prices Control) Order requirements, internal commercial policies or business negotiations with distributors and retailers, it noted. End
Reported by Surya Tripathi
Edited by Deepshikha Bhardwaj
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