Competition Commission of India

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Competition Law and Indian Pharmaceutical Industry

CCI had commissioned a study to Centre for Trade and Development (Centad) to study the sector and to identify the competition issues. The study has examined issues concerning working of pharmaceutical sector both from horizontal and vertical point of view. The study highlighted that the pharmaceutical markets in India are growing at an exponential rate. However, price competition among retailers can be hardly witnessed. The drug promotion matrix reveals that there are various unfair trade practices prevailing in the industry. In fact, authoritative studies, including those by the EU competition commission have noted that pharmaceutical companies spend more on promotion and advertising and less on research and development. There is evidence of inefficient allocation of resources in the distribution of pharmaceutical products as studies available indicate that the profitability margins in the distribution chain is quite high and specially in non-DPCO drugs and non-scheduled drugs in the pharmaceutical industry in India. This has implications on competition in the sector and unfair enrichment through wealth transfers.

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Page last updated on: 18/11/17

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