ISLAMABAD, 08 NOVEMBER 2016: The Competition Commission of Pakistan (CCP) has completed an inquiry and issued a show cause notice to the Pharma Bureau for prima facie engaging in collusive activities in violation of Section 4 of the Competition Act, 2010.

Pharma Bureau is the association of Multinational Pharmaceutical Companies (MPCs) and is part of the Oversees Investors’ Chamber of Commerce and Industry. The Commission took suo motu notice and conducted the inquiry against Pharma Bureau and its members for prima facie unreasonably increasing the prices of various medicines through collusive practices.

As part of the inquiry, the Commission also conducted a search and inspection of the Pharma Bureau early this year under Section 34 of the Competition Act during which the Bureau fully cooperated with the inspection team of CCP and handed over the relevant record to CCP for examination.

The enquiry report concluded that the Pharma Bureau and its members appear to have been involved in sharing of strategic and commercially sensitive information, providing updates and overview of prices, cost, profits, demand, and the industry as a whole. The report further stated that this information was used to deliberate upon and prepare recommendations, agreements and decisions on increase in prices of various pharmaceutical products by the companies through the platform of Pharma Bureau.

It would be pertinent to mention here that Section 4 of the Act, inter alia, prohibits trade associations from taking decisions on commercial matters of its members such as pricing, production, and sales etc. As per the inquiry report, the sharing of above information by Pharma Bureau and its members constitute prima facie violation of Section 4 of the Act.

It is well-established principle of competition law that not only formal and informal price-fixing agreements, understandings and decisions, but also exchange of commercially sensitive information and setting prices, among other things, between the competitors by themselves or through the medium of their association(s) reduces uncertainty for each of the participant as to the conduct of their competitors, which results in restriction of competition by object and ultimately consumer harm. Pharma Bureau has been directed to file a reply to the allegations within fourteen days and has been provided an opportunity of hearing before the Commission.